Correlation Between FNB Corp and JP Morgan

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

Diversification Opportunities for FNB Corp and JP Morgan

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between FNB Corp and JP Morgan is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding FNB Corp 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 FNB Corp 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 FNB Corp 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 FNB Corp i.e., FNB Corp and JP Morgan go up and down completely randomly.

Pair Corralation between FNB Corp and JP Morgan

Considering the 90-day investment horizon FNB Corp is expected to generate 1.12 times more return on investment than JP Morgan. However, FNB Corp is 1.12 times more volatile than JP Morgan Chase. It trades about 0.02 of its potential returns per unit of risk. JP Morgan Chase is currently generating about -0.04 per unit of risk. If you would invest  1,238  in FNB Corp on May 20, 2022 and sell it today you would earn a total of  47.00  from holding FNB Corp or generate 3.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

FNB Corp  vs.  JP Morgan Chase

 Performance (%) 
       Timeline  
FNB Corp 
FNB Corp Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in FNB Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, FNB Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

FNB Corp Price Channel

JP Morgan Chase 
JP Morgan Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in JP Morgan Chase are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, JP Morgan may actually be approaching a critical reversion point that can send shares even higher in September 2022.

JP Morgan Price Channel

FNB Corp and JP Morgan Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FNB Corp and JP Morgan

The main advantage of trading using opposite FNB Corp and JP Morgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNB Corp 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.

FNB Corp

Pair trading matchups for FNB Corp

The idea behind FNB Corp 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.
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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