Correlation Between JPMorgan Chase and PIMCO RAFI
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and PIMCO RAFI 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 PIMCO RAFI 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 PIMCO RAFI Dynamic, you can compare the effects of market volatilities on JPMorgan Chase and PIMCO RAFI 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 PIMCO RAFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and PIMCO RAFI.
Diversification Opportunities for JPMorgan Chase and PIMCO RAFI
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and PIMCO is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and PIMCO RAFI Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO RAFI Dynamic 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 PIMCO RAFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO RAFI Dynamic has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and PIMCO RAFI go up and down completely randomly.
Pair Corralation between JPMorgan Chase and PIMCO RAFI
Considering the 90-day investment horizon JPMorgan Chase Co is expected to under-perform the PIMCO RAFI. In addition to that, JPMorgan Chase is 2.22 times more volatile than PIMCO RAFI Dynamic. It trades about -0.21 of its total potential returns per unit of risk. PIMCO RAFI Dynamic is currently generating about -0.14 per unit of volatility. If you would invest 1,943 in PIMCO RAFI Dynamic on January 20, 2024 and sell it today you would lose (45.00) from holding PIMCO RAFI Dynamic or give up 2.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
JPMorgan Chase Co vs. PIMCO RAFI Dynamic
Performance |
| Timeline |
| JPMorgan Chase |
| PIMCO RAFI Dynamic |
JPMorgan Chase and PIMCO RAFI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and PIMCO RAFI
The main advantage of trading using opposite JPMorgan Chase and PIMCO RAFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, PIMCO RAFI 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 PIMCO RAFI will offset losses from the drop in PIMCO RAFI's long position.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
| PIMCO RAFI vs. PIMCO RAFI Dynamic | PIMCO RAFI vs. PIMCO RAFI Dynamic | PIMCO RAFI vs. JPMorgan Diversified Return | PIMCO RAFI vs. JPMorgan Diversified Return |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |