Correlation Between Barclays PLC and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both Barclays PLC 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 Barclays PLC and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays PLC ADR and JPMorgan Chase Co, you can compare the effects of market volatilities on Barclays PLC 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 Barclays PLC with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays PLC and JPMorgan Chase.
Diversification Opportunities for Barclays PLC and JPMorgan Chase
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Barclays and JPMorgan is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Barclays PLC ADR and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Barclays PLC 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 Barclays PLC ADR 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 Barclays PLC i.e., Barclays PLC and JPMorgan Chase go up and down completely randomly.
Pair Corralation between Barclays PLC and JPMorgan Chase
Considering the 90-day investment horizon Barclays PLC is expected to generate 1.26 times less return on investment than JPMorgan Chase. In addition to that, Barclays PLC is 1.49 times more volatile than JPMorgan Chase Co. It trades about 0.04 of its total potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.07 per unit of volatility. If you would invest 11,354 in JPMorgan Chase Co on January 21, 2024 and sell it today you would earn a total of 7,226 from holding JPMorgan Chase Co or generate 63.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Barclays PLC ADR vs. JPMorgan Chase Co
Performance |
| Timeline |
| Barclays PLC ADR |
| JPMorgan Chase |
Barclays PLC and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays PLC and JPMorgan Chase
The main advantage of trading using opposite Barclays PLC and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays PLC 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.| Barclays PLC vs. Banco Bilbao Viscaya | Barclays PLC vs. Banco Santander SA | Barclays PLC vs. UBS Group AG | Barclays PLC vs. HSBC Holdings PLC |
| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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