Correlation Between JPMorgan Chase and AMERICAN BEACON

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

Diversification Opportunities for JPMorgan Chase and AMERICAN BEACON

0.04
  Correlation Coefficient

Significant diversification

The 3 months correlation between JPMorgan and AMERICAN is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and AMERICAN BEACON MID-CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN BEACON MID-CAP 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 AMERICAN BEACON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN BEACON MID-CAP has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and AMERICAN BEACON go up and down completely randomly.

Pair Corralation between JPMorgan Chase and AMERICAN BEACON

If you would invest  13,145  in JPMorgan Chase Co on September 9, 2022 and sell it today you would earn a total of  5.00  from holding JPMorgan Chase Co or generate 0.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy42.86%
ValuesDaily Returns

JPMorgan Chase Co  vs.  AMERICAN BEACON MID-CAP

 Performance (%) 
       Timeline  
JPMorgan Chase 
JPMorgan Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, JPMorgan Chase may actually be approaching a critical reversion point that can send shares even higher in January 2023.

JPMorgan Price Channel

AMERICAN BEACON MID-CAP 
AMERICAN Performance
0 of 100
Over the last 90 days AMERICAN BEACON MID-CAP has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly unsteady basic indicators, AMERICAN BEACON may actually be approaching a critical reversion point that can send shares even higher in January 2023.

JPMorgan Chase and AMERICAN BEACON Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JPMorgan Chase and AMERICAN BEACON

The main advantage of trading using opposite JPMorgan Chase and AMERICAN BEACON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, AMERICAN BEACON 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 AMERICAN BEACON will offset losses from the drop in AMERICAN BEACON's long position.
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The idea behind JPMorgan Chase Co and AMERICAN BEACON MID-CAP 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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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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