Correlation Between Exxon and JPMorgan Active

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

By analyzing existing cross correlation between Exxon Mobil Corp and JPMorgan Active Value, you can compare the effects of market volatilities on Exxon and JPMorgan Active 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 Exxon with a short position of JPMorgan Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and JPMorgan Active.

Diversification Opportunities for Exxon and JPMorgan Active

0.67

Correlation Coefficient

Exxon  JPMorgan Active

Poor diversification

The 3 months correlation between Exxon and JPMorgan is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and JPMorgan Active Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Active Value and Exxon 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 Exxon Mobil Corp are associated (or correlated) with JPMorgan Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Active Value has no effect on the direction of Exxon i.e., Exxon and JPMorgan Active go up and down completely randomly.

Pair Corralation between Exxon and JPMorgan Active

Considering the 90-day investment horizon Exxon is expected to generate 1.78 times less return on investment than JPMorgan Active. In addition to that, Exxon is 1.75 times more volatile than JPMorgan Active Value. It trades about 0.09 of its total potential returns per unit of risk. JPMorgan Active Value is currently generating about 0.27 per unit of volatility. If you would invest  5,818  in JPMorgan Active Value on April 20, 2025 and sell it today you would earn a total of  804.00  from holding JPMorgan Active Value or generate 13.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Exxon Mobil Corp  vs.  JPMorgan Active Value

Exxon Mobil Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Exxon Mobil Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Exxon may actually be approaching a critical reversion point that can send shares even higher in August 2025.

JPMorgan Active Value

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Active Value are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, JPMorgan Active sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exxon and JPMorgan Active

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

The idea behind Exxon Mobil Corp and JPMorgan Active Value 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..