Correlation Between Twitter and JP Morgan

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Can any of the company-specific risk be diversified away by investing in both Twitter 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 Twitter and JP Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Twitter and JP Morgan Chase, you can compare the effects of market volatilities on Twitter 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 Twitter with a short position of JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twitter and JP Morgan.

Diversification Opportunities for Twitter and JP Morgan

0.26
  Correlation Coefficient

Modest diversification

The 3 months correlation between Twitter and JP Morgan is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Twitter and JP Morgan Chase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JP Morgan Chase and Twitter 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 Twitter 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 Chase has no effect on the direction of Twitter i.e., Twitter and JP Morgan go up and down completely randomly.

Pair Corralation between Twitter and JP Morgan

Given the investment horizon of 90 days Twitter is expected to generate 2.04 times more return on investment than JP Morgan. However, Twitter is 2.04 times more volatile than JP Morgan Chase. It trades about 0.0 of its potential returns per unit of risk. JP Morgan Chase is currently generating about -0.08 per unit of risk. If you would invest  6,210  in Twitter on July 7, 2022 and sell it today you would lose (1,080)  from holding Twitter or give up 17.39% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Twitter  vs.  JP Morgan Chase

 Performance (%) 
       Timeline  
Twitter 
Twitter Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Twitter are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Twitter reported solid returns over the last few months and may actually be approaching a breakup point.

Twitter Price Channel

JP Morgan Chase 
JP Morgan Performance
0 of 100
Over the last 90 days JP Morgan Chase has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, JP Morgan is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

JP Morgan Price Channel

Twitter and JP Morgan Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Twitter and JP Morgan

The main advantage of trading using opposite Twitter and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twitter 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.
Twitter vs. Tencent Holdings
The idea behind Twitter and JP Morgan Chase 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.
JP Morgan vs. Amazon Inc
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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