Correlation Between JPMorgan Chase and Macys
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Macys 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 Macys 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 Macys Inc, you can compare the effects of market volatilities on JPMorgan Chase and Macys 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 Macys. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Macys.
Diversification Opportunities for JPMorgan Chase and Macys
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPMorgan and Macys is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Macys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macys Inc 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 Macys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macys Inc has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Macys go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Macys
Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.74 times more return on investment than Macys. However, JPMorgan Chase Co is 1.35 times less risky than Macys. It trades about -0.17 of its potential returns per unit of risk. Macys Inc is currently generating about -0.22 per unit of risk. If you would invest 19,791 in JPMorgan Chase Co on January 21, 2024 and sell it today you would lose (1,211) from holding JPMorgan Chase Co or give up 6.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Macys Inc
Performance |
| Timeline |
| JPMorgan Chase |
| Macys Inc |
JPMorgan Chase and Macys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Macys
The main advantage of trading using opposite JPMorgan Chase and Macys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Macys 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 Macys will offset losses from the drop in Macys' long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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