Correlation Between ANZ Group and JPMorgan Chase

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

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

Diversification Opportunities for ANZ Group and JPMorgan Chase

0.76

Correlation Coefficient

ANZ Group  JPMorgan Chase

Poor diversification

The 3 months correlation between ANZ and JPMorgan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding ANZ Group Holdings and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and ANZ Group 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 ANZ Group Holdings 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 ANZ Group i.e., ANZ Group and JPMorgan Chase go up and down completely randomly.

Pair Corralation between ANZ Group and JPMorgan Chase

Assuming the 90 days horizon ANZ Group Holdings is expected to generate 3.0 times more return on investment than JPMorgan Chase. However, ANZ Group is 3.0 times more volatile than JPMorgan Chase Co. It trades about 0.17 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.07 per unit of risk. If you would invest  1,826  in ANZ Group Holdings on August 8, 2024 and sell it today you would earn a total of  232.00  from holding ANZ Group Holdings or generate 12.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

ANZ Group Holdings  vs.  JPMorgan Chase Co

ANZ Group Holdings

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ANZ Group Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, ANZ Group may actually be approaching a critical reversion point that can send shares even higher in December 2024.

JPMorgan Chase

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, JPMorgan Chase is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ANZ Group and JPMorgan Chase

The main advantage of trading using opposite ANZ Group and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANZ Group 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 ANZ Group Holdings 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.