Correlation Between Global X and JPMorgan Chase

Can any of the company-specific risk be diversified away by investing in both Global X and JPMorgan Chase 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 Global X and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global X MLP and JPMorgan Chase Financial, you can compare the effects of market volatilities on Global X and JPMorgan Chase 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 Global X with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and JPMorgan Chase.

Diversification Opportunities for Global X and JPMorgan Chase

0.99

Correlation Coefficient

Global X  JPMorgan Chase

No risk reduction

The 3 months correlation between Global and JPMorgan is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Global X MLP and JPMorgan Chase Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase Financial and Global X 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 Global X MLP are associated (or correlated) with JPMorgan Chase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Chase Financial has no effect on the direction of Global X i.e., Global X and JPMorgan Chase go up and down completely randomly.

Pair Corralation between Global X and JPMorgan Chase

Given the investment horizon of 90 days Global X is expected to generate 1.1 times less return on investment than JPMorgan Chase. But when comparing it to its historical volatility, Global X MLP is 1.08 times less risky than JPMorgan Chase. It trades about 0.25 of its potential returns per unit of risk. JPMorgan Chase Financial is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  2,778  in JPMorgan Chase Financial on September 2, 2024 and sell it today you would earn a total of  385.00  from holding JPMorgan Chase Financial or generate 13.86% return on investment over 90 days.

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

Global X MLP  vs.  JPMorgan Chase Financial

Global X MLP

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global X MLP are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in January 2025.

JPMorgan Chase Financial

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Financial are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward-looking indicators, JPMorgan Chase sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global X and JPMorgan Chase

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

The idea behind Global X MLP and JPMorgan Chase Financial 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.