Correlation Between JPMorgan Chase and Schroders PLC

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

Diversification Opportunities for JPMorgan Chase and Schroders PLC

-0.77

Correlation Coefficient

JPMorgan Chase  Schroders PLC

Pay attention - limited upside

The 3 months correlation between JPMorgan and Schroders is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Schroders PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroders PLC 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 Schroders PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroders PLC has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Schroders PLC go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Schroders PLC

Considering the 90-day investment horizon JPMorgan Chase is expected to generate 18.56 times less return on investment than Schroders PLC. But when comparing it to its historical volatility, JPMorgan Chase Co is 1.66 times less risky than Schroders PLC. It trades about 0.01 of its potential returns per unit of risk. Schroders PLC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  420.00  in Schroders PLC on December 21, 2024 and sell it today you would earn a total of  70.00  from holding Schroders PLC or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	81.67%
Values	Daily Returns

JPMorgan Chase Co  vs.  Schroders PLC

JPMorgan Chase

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPMorgan Chase Co has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Schroders PLC

Risk-Adjusted Performance

OK

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

Pair Trading with JPMorgan Chase and Schroders PLC

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

The idea behind JPMorgan Chase Co and Schroders PLC 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.