Correlation Between Alfa Holdings and JPMorgan Chase

Can any of the company-specific risk be diversified away by investing in both Alfa Holdings and JPMorgan Chase 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 Alfa Holdings and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alfa Holdings SA and JPMorgan Chase Co, you can compare the effects of market volatilities on Alfa Holdings and JPMorgan Chase 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 Alfa Holdings with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Holdings and JPMorgan Chase.

Diversification Opportunities for Alfa Holdings and JPMorgan Chase

0.35

Correlation Coefficient

Alfa Holdings  JPMorgan Chase

Weak diversification

The 3 months correlation between Alfa and JPMorgan is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Holdings SA and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Alfa Holdings 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 Alfa Holdings SA are associated (or correlated) with JPMorgan Chase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Chase has no effect on the direction of Alfa Holdings i.e., Alfa Holdings and JPMorgan Chase go up and down completely randomly.

Pair Corralation between Alfa Holdings and JPMorgan Chase

Assuming the 90 days trading horizon Alfa Holdings SA is expected to under-perform the JPMorgan Chase. In addition to that, Alfa Holdings is 2.88 times more volatile than JPMorgan Chase Co. It trades about -0.13 of its total potential returns per unit of risk. JPMorgan Chase Co is currently generating about -0.04 per unit of volatility. If you would invest  14,699  in JPMorgan Chase Co on December 30, 2024 and sell it today you would lose (749.00) from holding JPMorgan Chase Co or give up 5.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Alfa Holdings SA  vs.  JPMorgan Chase Co

Alfa Holdings SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alfa Holdings SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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. Despite somewhat strong primary indicators, JPMorgan Chase is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alfa Holdings and JPMorgan Chase

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

The idea behind Alfa Holdings SA and JPMorgan Chase Co 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.