Correlation Between JPMorgan Chase and UHF Logistics

Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and UHF Logistics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining JPMorgan Chase and UHF Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JPMorgan Chase Co and UHF Logistics Group, you can compare the effects of market volatilities on JPMorgan Chase and UHF Logistics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in JPMorgan Chase with a short position of UHF Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and UHF Logistics.

Diversification Opportunities for JPMorgan Chase and UHF Logistics

-0.36

Correlation Coefficient

JPMorgan Chase  UHF Logistics

Very good diversification

The 3 months correlation between JPMorgan and UHF is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and UHF Logistics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UHF Logistics Group and JPMorgan Chase is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on JPMorgan Chase Co are associated (or correlated) with UHF Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UHF Logistics Group has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and UHF Logistics go up and down completely randomly.

Pair Corralation between JPMorgan Chase and UHF Logistics

Considering the 90-day investment horizon JPMorgan Chase is expected to generate 15.19 times less return on investment than UHF Logistics. But when comparing it to its historical volatility, JPMorgan Chase Co is 18.49 times less risky than UHF Logistics. It trades about 0.16 of its potential returns per unit of risk. UHF Logistics Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  6.75  in UHF Logistics Group on September 13, 2024 and sell it today you would lose (0.75) from holding UHF Logistics Group or give up 11.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

JPMorgan Chase Co  vs.  UHF Logistics Group

JPMorgan Chase

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.

UHF Logistics Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UHF Logistics Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, UHF Logistics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and UHF Logistics

The main advantage of trading using opposite JPMorgan Chase and UHF Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, UHF Logistics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in UHF Logistics will offset losses from the drop in UHF Logistics' long position.

The idea behind JPMorgan Chase Co and UHF Logistics Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.