Correlation Between Bank of NT and JPMorgan Chase

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

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

Diversification Opportunities for Bank of NT and JPMorgan Chase

-0.39

Correlation Coefficient

Bank of NT  JPMorgan Chase

Very good diversification

The 3 months correlation between Bank and JPMorgan is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bank of NT and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Bank of NT 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 Bank of NT 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 has no effect on the direction of Bank of NT i.e., Bank of NT and JPMorgan Chase go up and down completely randomly.

Pair Corralation between Bank of NT and JPMorgan Chase

Considering the 90-day investment horizon Bank of NT is expected to generate 2.03 times more return on investment than JPMorgan Chase. However, Bank of NT is 2.03 times more volatile than JPMorgan Chase Co. It trades about 0.01 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about -0.04 per unit of risk. If you would invest  3,756  in Bank of NT on August 31, 2024 and sell it today you would earn a total of  14.00  from holding Bank of NT or generate 0.37% return on investment over 90 days.

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

Bank of NT  vs.  JPMorgan Chase Co

Bank of NT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank of NT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bank of NT is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

JPMorgan Chase

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan Chase Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, JPMorgan Chase is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Bank of NT and JPMorgan Chase

The main advantage of trading using opposite Bank of NT and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of NT 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 Bank of NT and JPMorgan Chase Co 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.