Correlation Between JPMorgan Chase and Kaiser

Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Kaiser 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 Kaiser 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 Kaiser Aluminum 4625, you can compare the effects of market volatilities on JPMorgan Chase and Kaiser 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 Kaiser. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Kaiser.

Diversification Opportunities for JPMorgan Chase and Kaiser

0.57

Correlation Coefficient

JPMorgan Chase  Kaiser

Very weak diversification

The 3 months correlation between JPMorgan and Kaiser is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Kaiser Aluminum 4625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum 4625 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 Kaiser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaiser Aluminum 4625 has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Kaiser go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Kaiser

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 3.87 times more return on investment than Kaiser. However, JPMorgan Chase is 3.87 times more volatile than Kaiser Aluminum 4625. It trades about 0.01 of its potential returns per unit of risk. Kaiser Aluminum 4625 is currently generating about -0.01 per unit of risk. If you would invest  24,161  in JPMorgan Chase Co on December 10, 2024 and sell it today you would earn a total of  67.00  from holding JPMorgan Chase Co or generate 0.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

JPMorgan Chase Co  vs.  Kaiser Aluminum 4625

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.

Kaiser Aluminum 4625

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kaiser Aluminum 4625 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Kaiser is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JPMorgan Chase and Kaiser

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

The idea behind JPMorgan Chase Co and Kaiser Aluminum 4625 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.