Correlation Between JPMorgan Chase and Southern ITS

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

Diversification Opportunities for JPMorgan Chase and Southern ITS

-0.44

Correlation Coefficient

JPMorgan Chase  Southern ITS

Very good diversification

The 3 months correlation between JPMorgan and Southern is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Southern ITS International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern ITS Interna 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 Southern ITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern ITS Interna has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Southern ITS go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Southern ITS

Considering the 90-day investment horizon JPMorgan Chase Co is expected to under-perform the Southern ITS. But the stock apears to be less risky and, when comparing its historical volatility, JPMorgan Chase Co is 5.19 times less risky than Southern ITS. The stock trades about -0.04 of its potential returns per unit of risk. The Southern ITS International is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  4.01  in Southern ITS International on September 15, 2024 and sell it today you would earn a total of  0.49  from holding Southern ITS International or generate 12.22% return on investment over 90 days.

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

JPMorgan Chase Co  vs.  Southern ITS International

JPMorgan Chase

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 10 (%) 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.

Southern ITS Interna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Southern ITS International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Southern ITS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with JPMorgan Chase and Southern ITS

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

The idea behind JPMorgan Chase Co and Southern ITS 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.