Correlation Between JPMorgan Chase and LifePoint

Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and LifePoint 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 LifePoint 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 LifePoint Health 4375, you can compare the effects of market volatilities on JPMorgan Chase and LifePoint 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 LifePoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and LifePoint.

Diversification Opportunities for JPMorgan Chase and LifePoint

-0.33

Correlation Coefficient

JPMorgan Chase  LifePoint

Very good diversification

The 3 months correlation between JPMorgan and LifePoint is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and LifePoint Health 4375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LifePoint Health 4375 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 LifePoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LifePoint Health 4375 has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and LifePoint go up and down completely randomly.

Pair Corralation between JPMorgan Chase and LifePoint

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 1.2 times more return on investment than LifePoint. However, JPMorgan Chase is 1.2 times more volatile than LifePoint Health 4375. It trades about 0.13 of its potential returns per unit of risk. LifePoint Health 4375 is currently generating about -0.15 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  3,160  from holding JPMorgan Chase Co or generate 15.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.23%
Values	Daily Returns

JPMorgan Chase Co  vs.  LifePoint Health 4375

JPMorgan Chase

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 9 (%) 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.

LifePoint Health 4375

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LifePoint Health 4375 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for LifePoint Health 4375 investors.

Pair Trading with JPMorgan Chase and LifePoint

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

The idea behind JPMorgan Chase Co and LifePoint Health 4375 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.