Correlation Between JPMorgan Chase and BIONTECH

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

Diversification Opportunities for JPMorgan Chase and BIONTECH

0.59

Correlation Coefficient

JPMorgan Chase  BIONTECH

Very weak diversification

The 3 months correlation between JPMorgan and BIONTECH is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and BIONTECH SE DRN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIONTECH SE DRN 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 BIONTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIONTECH SE DRN has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and BIONTECH go up and down completely randomly.

Pair Corralation between JPMorgan Chase and BIONTECH

Assuming the 90 days trading horizon JPMorgan Chase Co is expected to generate 0.72 times more return on investment than BIONTECH. However, JPMorgan Chase Co is 1.4 times less risky than BIONTECH. It trades about 0.23 of its potential returns per unit of risk. BIONTECH SE DRN is currently generating about 0.07 per unit of risk. If you would invest  11,478  in JPMorgan Chase Co on September 28, 2024 and sell it today you would earn a total of  3,577  from holding JPMorgan Chase Co or generate 31.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

JPMorgan Chase Co  vs.  BIONTECH SE DRN

JPMorgan Chase

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, JPMorgan Chase sustained solid returns over the last few months and may actually be approaching a breakup point.

BIONTECH SE DRN

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BIONTECH SE DRN are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BIONTECH may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with JPMorgan Chase and BIONTECH

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

The idea behind JPMorgan Chase Co and BIONTECH SE DRN 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.