Correlation Between Element Fleet and JPMorgan Chase

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

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

Diversification Opportunities for Element Fleet and JPMorgan Chase

0.36

Correlation Coefficient

Element Fleet  JPMorgan Chase

Weak diversification

The 3 months correlation between Element and JPMorgan is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Element Fleet Management and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Element Fleet 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 Element Fleet Management 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 Element Fleet i.e., Element Fleet and JPMorgan Chase go up and down completely randomly.

Pair Corralation between Element Fleet and JPMorgan Chase

Assuming the 90 days trading horizon Element Fleet is expected to generate 8.01 times less return on investment than JPMorgan Chase. But when comparing it to its historical volatility, Element Fleet Management is 1.64 times less risky than JPMorgan Chase. It trades about 0.03 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,777  in JPMorgan Chase Co on September 26, 2024 and sell it today you would earn a total of  440.00  from holding JPMorgan Chase Co or generate 15.84% return on investment over 90 days.

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

Element Fleet Management  vs.  JPMorgan Chase Co

Element Fleet Management

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Element Fleet Management are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Element Fleet is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

JPMorgan Chase

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Element Fleet and JPMorgan Chase

The main advantage of trading using opposite Element Fleet and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Element Fleet 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 Element Fleet Management 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.