Correlation Between JPMorgan Chase and SPDR Barclays

Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and SPDR Barclays 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 SPDR Barclays 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 SPDR Barclays Long, you can compare the effects of market volatilities on JPMorgan Chase and SPDR Barclays 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 SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and SPDR Barclays.

Diversification Opportunities for JPMorgan Chase and SPDR Barclays

-0.21

Correlation Coefficient

JPMorgan Chase  SPDR Barclays

Very good diversification

The 3 months correlation between JPMorgan and SPDR is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and SPDR Barclays Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays Long 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 SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays Long has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and SPDR Barclays go up and down completely randomly.

Pair Corralation between JPMorgan Chase and SPDR Barclays

Considering the 90-day investment horizon JPMorgan Chase Co is expected to under-perform the SPDR Barclays. In addition to that, JPMorgan Chase is 2.65 times more volatile than SPDR Barclays Long. It trades about -0.02 of its total potential returns per unit of risk. SPDR Barclays Long is currently generating about 0.02 per unit of volatility. If you would invest  2,612  in SPDR Barclays Long on February 3, 2025 and sell it today you would earn a total of  28.00  from holding SPDR Barclays Long or generate 1.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

JPMorgan Chase Co  vs.  SPDR Barclays Long

JPMorgan Chase

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPMorgan Chase Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, JPMorgan Chase is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

SPDR Barclays Long

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Barclays Long are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, SPDR Barclays is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with JPMorgan Chase and SPDR Barclays

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

The idea behind JPMorgan Chase Co and SPDR Barclays Long 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.