Correlation Between JPMorgan Chase and Beazley Plc

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

Diversification Opportunities for JPMorgan Chase and Beazley Plc

-0.6

Correlation Coefficient

JPMorgan Chase  Beazley Plc

Excellent diversification

The 3 months correlation between JPMorgan and Beazley is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Beazley plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beazley plc 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 Beazley Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beazley plc has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Beazley Plc go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Beazley Plc

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 1.1 times more return on investment than Beazley Plc. However, JPMorgan Chase is 1.1 times more volatile than Beazley plc. It trades about 0.11 of its potential returns per unit of risk. Beazley plc is currently generating about 0.0 per unit of risk. If you would invest  21,896  in JPMorgan Chase Co on September 3, 2024 and sell it today you would earn a total of  3,076  from holding JPMorgan Chase Co or generate 14.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

JPMorgan Chase Co  vs.  Beazley plc

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 fragile basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.

Beazley plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beazley plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Beazley Plc is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with JPMorgan Chase and Beazley Plc

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

The idea behind JPMorgan Chase Co and Beazley plc 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.