Correlation Between JPMorgan Chase and Enova International

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

Diversification Opportunities for JPMorgan Chase and Enova International

0.97

Correlation Coefficient

JPMorgan Chase  Enova International

Almost no diversification

The 3 months correlation between JPMorgan and Enova is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Enova International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enova International 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 Enova International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enova International has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Enova International go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Enova International

Considering the 90-day investment horizon JPMorgan Chase is expected to generate 1.64 times less return on investment than Enova International. But when comparing it to its historical volatility, JPMorgan Chase Co is 1.13 times less risky than Enova International. It trades about 0.15 of its potential returns per unit of risk. Enova International is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  7,735  in Enova International on September 12, 2024 and sell it today you would earn a total of  2,481  from holding Enova International or generate 32.07% return on investment over 90 days.

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

JPMorgan Chase Co  vs.  Enova International

JPMorgan Chase

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 11 (%) 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.

Enova International

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enova International are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Enova International sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and Enova International

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

The idea behind JPMorgan Chase Co and Enova International 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.