Correlation Between JPMorgan Chase and Baron Select

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

Diversification Opportunities for JPMorgan Chase and Baron Select

0.83

Correlation Coefficient

JPMorgan Chase  Baron Select

Very poor diversification

The 3 months correlation between JPMorgan and Baron is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Baron Select Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Select Funds 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 Baron Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Select Funds has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Baron Select go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Baron Select

Considering the 90-day investment horizon JPMorgan Chase is expected to generate 1.51 times less return on investment than Baron Select. In addition to that, JPMorgan Chase is 1.65 times more volatile than Baron Select Funds. It trades about 0.11 of its total potential returns per unit of risk. Baron Select Funds is currently generating about 0.28 per unit of volatility. If you would invest  1,054  in Baron Select Funds on September 2, 2024 and sell it today you would earn a total of  250.00  from holding Baron Select Funds or generate 23.72% return on investment over 90 days.

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

JPMorgan Chase Co  vs.  Baron Select Funds

JPMorgan Chase

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 8 (%) 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.

Baron Select Funds

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Baron Select Funds are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Baron Select showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and Baron Select

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

The idea behind JPMorgan Chase Co and Baron Select Funds 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.