Correlation Between JPMorgan Chase and Trans Global

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

Diversification Opportunities for JPMorgan Chase and Trans Global

0.47

Correlation Coefficient

JPMorgan Chase  Trans Global

Very weak diversification

The 3 months correlation between JPMorgan and Trans is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Trans Global Grp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trans Global Grp 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 Trans Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trans Global Grp has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Trans Global go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Trans Global

Considering the 90-day investment horizon JPMorgan Chase is expected to generate 208.49 times less return on investment than Trans Global. But when comparing it to its historical volatility, JPMorgan Chase Co is 28.73 times less risky than Trans Global. It trades about 0.03 of its potential returns per unit of risk. Trans Global Grp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Trans Global Grp on December 28, 2024 and sell it today you would earn a total of  0.01  from holding Trans Global Grp or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

JPMorgan Chase Co  vs.  Trans Global Grp

JPMorgan Chase

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 2 (%) 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 newest stock price disarray, may contribute to short-term losses for the investors.

Trans Global Grp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Trans Global Grp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting technical and fundamental indicators, Trans Global demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and Trans Global

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

The idea behind JPMorgan Chase Co and Trans Global Grp 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.