Correlation Between JPMorgan Chase and Santos

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

Diversification Opportunities for JPMorgan Chase and Santos

-0.7

Correlation Coefficient

JPMorgan Chase  Santos

Excellent diversification

The 3 months correlation between JPMorgan and Santos is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Santos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santos 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 Santos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santos has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Santos go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Santos

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.54 times more return on investment than Santos. However, JPMorgan Chase Co is 1.86 times less risky than Santos. It trades about 0.13 of its potential returns per unit of risk. Santos is currently generating about -0.04 per unit of risk. If you would invest  20,798  in JPMorgan Chase Co on September 17, 2024 and sell it today you would earn a total of  3,196  from holding JPMorgan Chase Co or generate 15.37% 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.  Santos

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.

Santos

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Santos has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with JPMorgan Chase and Santos

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

The idea behind JPMorgan Chase Co and Santos 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.