Correlation Between Disney and JP Morgan

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

By analyzing existing cross correlation between Walt Disney and JP Morgan Exchange Traded, you can compare the effects of market volatilities on Disney and JP Morgan 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 Disney with a short position of JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and JP Morgan.

Diversification Opportunities for Disney and JP Morgan

0.92

Correlation Coefficient

Disney  JP Morgan

Almost no diversification

The 3 months correlation between Disney and JDIV is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and JP Morgan Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JP Morgan Exchange and Disney 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 Walt Disney are associated (or correlated) with JP Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JP Morgan Exchange has no effect on the direction of Disney i.e., Disney and JP Morgan go up and down completely randomly.

Pair Corralation between Disney and JP Morgan

Considering the 90-day investment horizon Walt Disney is expected to generate 2.54 times more return on investment than JP Morgan. However, Disney is 2.54 times more volatile than JP Morgan Exchange Traded. It trades about 0.24 of its potential returns per unit of risk. JP Morgan Exchange Traded is currently generating about 0.17 per unit of risk. If you would invest  9,178  in Walt Disney on May 6, 2025 and sell it today you would earn a total of  2,757  from holding Walt Disney or generate 30.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Walt Disney  vs.  JP Morgan Exchange Traded

Walt Disney

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walt Disney are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Disney unveiled solid returns over the last few months and may actually be approaching a breakup point.

JP Morgan Exchange

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JP Morgan Exchange Traded are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward indicators, JP Morgan may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Disney and JP Morgan

The main advantage of trading using opposite Disney and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, JP Morgan 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 JP Morgan will offset losses from the drop in JP Morgan's long position.

The idea behind Walt Disney and JP Morgan Exchange Traded 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 Commodity Directory module to find actively traded commodities issued by global exchanges.