Correlation Between JPMorgan Chase and Tattooed Chef

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

Diversification Opportunities for JPMorgan Chase and Tattooed Chef

-0.85

Correlation Coefficient

JPMorgan Chase  Tattooed Chef

Pay attention - limited upside

The 3 months correlation between JPMorgan and Tattooed is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Tattooed Chef in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tattooed Chef 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 Tattooed Chef. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tattooed Chef has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Tattooed Chef go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Tattooed Chef

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.16 times more return on investment than Tattooed Chef. However, JPMorgan Chase Co is 6.15 times less risky than Tattooed Chef. It trades about 0.1 of its potential returns per unit of risk. Tattooed Chef is currently generating about -0.17 per unit of risk. If you would invest  12,392  in JPMorgan Chase Co on September 12, 2024 and sell it today you would earn a total of  11,894  from holding JPMorgan Chase Co or generate 95.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	29.29%
Values	Daily Returns

JPMorgan Chase Co  vs.  Tattooed Chef

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.

Tattooed Chef

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tattooed Chef has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Tattooed Chef is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with JPMorgan Chase and Tattooed Chef

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

The idea behind JPMorgan Chase Co and Tattooed Chef 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.