Correlation Between JPMorgan Chase and Fortress Transportation

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

Diversification Opportunities for JPMorgan Chase and Fortress Transportation

0.73

Correlation Coefficient

JPMorgan Chase  Fortress Transportation

Poor diversification

The 3 months correlation between JPMorgan and Fortress is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Fortress Transportation And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Transportation 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 Fortress Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Transportation has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Fortress Transportation go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Fortress Transportation

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 8.78 times more return on investment than Fortress Transportation. However, JPMorgan Chase is 8.78 times more volatile than Fortress Transportation And. It trades about 0.16 of its potential returns per unit of risk. Fortress Transportation And is currently generating about 0.08 per unit of risk. If you would invest  20,308  in JPMorgan Chase Co on September 13, 2024 and sell it today you would earn a total of  4,045  from holding JPMorgan Chase Co or generate 19.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	58.73%
Values	Daily Returns

JPMorgan Chase Co  vs.  Fortress Transportation And

JPMorgan Chase

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 12 (%) 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.

Fortress Transportation

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Fortress Transportation And has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Fortress Transportation is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with JPMorgan Chase and Fortress Transportation

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

The idea behind JPMorgan Chase Co and Fortress Transportation And 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.