Correlation Between JPMorgan Chase and Singapore Technologies

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

Diversification Opportunities for JPMorgan Chase and Singapore Technologies

-0.38

Correlation Coefficient

JPMorgan Chase  Singapore Technologies

Very good diversification

The 3 months correlation between JPMorgan and Singapore is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Singapore Technologies Enginee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Technologies 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 Singapore Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Technologies has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Singapore Technologies go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Singapore Technologies

Considering the 90-day investment horizon JPMorgan Chase is expected to generate 29.67 times less return on investment than Singapore Technologies. But when comparing it to its historical volatility, JPMorgan Chase Co is 2.06 times less risky than Singapore Technologies. It trades about 0.02 of its potential returns per unit of risk. Singapore Technologies Engineering is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  3,328  in Singapore Technologies Engineering on December 21, 2024 and sell it today you would earn a total of  1,617  from holding Singapore Technologies Engineering or generate 48.59% return on investment over 90 days.

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

JPMorgan Chase Co  vs.  Singapore Technologies Enginee

JPMorgan Chase

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, JPMorgan Chase is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Singapore Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Technologies Engineering are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking signals, Singapore Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and Singapore Technologies

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

The idea behind JPMorgan Chase Co and Singapore Technologies Engineering 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.