Correlation Between JPMorgan Chase and Sino Biopharmaceutica

Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Sino Biopharmaceutica 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 Sino Biopharmaceutica 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 Sino Biopharmaceutical Ltd, you can compare the effects of market volatilities on JPMorgan Chase and Sino Biopharmaceutica 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 Sino Biopharmaceutica. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Sino Biopharmaceutica.

Diversification Opportunities for JPMorgan Chase and Sino Biopharmaceutica

-0.36

Correlation Coefficient

JPMorgan Chase  Sino Biopharmaceutica

Very good diversification

The 3 months correlation between JPMorgan and Sino is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Sino Biopharmaceutical Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Biopharmaceutical 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 Sino Biopharmaceutica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Biopharmaceutical has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Sino Biopharmaceutica go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Sino Biopharmaceutica

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.42 times more return on investment than Sino Biopharmaceutica. However, JPMorgan Chase Co is 2.35 times less risky than Sino Biopharmaceutica. It trades about 0.49 of its potential returns per unit of risk. Sino Biopharmaceutical Ltd is currently generating about -0.24 per unit of risk. If you would invest  23,638  in JPMorgan Chase Co on October 21, 2024 and sell it today you would earn a total of  2,278  from holding JPMorgan Chase Co or generate 9.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

JPMorgan Chase Co  vs.  Sino Biopharmaceutical Ltd

JPMorgan Chase

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 11 (%) 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.

Sino Biopharmaceutical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sino Biopharmaceutical Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with JPMorgan Chase and Sino Biopharmaceutica

The main advantage of trading using opposite JPMorgan Chase and Sino Biopharmaceutica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Sino Biopharmaceutica 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 Sino Biopharmaceutica will offset losses from the drop in Sino Biopharmaceutica's long position.

The idea behind JPMorgan Chase Co and Sino Biopharmaceutical Ltd 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.