Correlation Between Bank of China and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both Bank of China 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 Bank of China and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of China and JPMorgan Chase Co, you can compare the effects of market volatilities on Bank of China 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 Bank of China with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of China and JPMorgan Chase.
Diversification Opportunities for Bank of China and JPMorgan Chase
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and JPMorgan is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bank of China and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Bank of China 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 Bank of China 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 Bank of China i.e., Bank of China and JPMorgan Chase go up and down completely randomly.
Pair Corralation between Bank of China and JPMorgan Chase
Assuming the 90 days horizon Bank of China is expected to generate 5.43 times more return on investment than JPMorgan Chase. However, Bank of China is 5.43 times more volatile than JPMorgan Chase Co. It trades about 0.09 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.09 per unit of risk. If you would invest 18.00 in Bank of China on September 24, 2024 and sell it today you would earn a total of 29.00 from holding Bank of China or generate 161.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bank of China vs. JPMorgan Chase Co
Performance |
Timeline |
Bank of China |
JPMorgan Chase |
Bank of China and JPMorgan Chase Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of China and JPMorgan Chase
The main advantage of trading using opposite Bank of China and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of China 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.Bank of China vs. JPMorgan Chase Co | Bank of China vs. Bank of America | Bank of China vs. Wells Fargo | Bank of China vs. China Construction Bank |
JPMorgan Chase vs. Bank of America | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. China Construction Bank | JPMorgan Chase vs. HSBC Holdings plc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
Stocks Directory Find actively traded stocks across global markets | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |