Correlation Between Howard Bancorp and JP Morgan

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

Diversification Opportunities for Howard Bancorp and JP Morgan

-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between Howard and JP Morgan is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Howard Bancorp Inc 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 Howard Bancorp 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 Howard Bancorp 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 Howard Bancorp i.e., Howard Bancorp and JP Morgan go up and down completely randomly.

Pair Corralation between Howard Bancorp and JP Morgan

If you would invest  11,701  in JP Morgan Chase on May 12, 2022 and sell it today you would earn a total of  138.00  from holding JP Morgan Chase or generate 1.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy1.61%
ValuesDaily Returns

Howard Bancorp Inc  vs.  JP Morgan Chase

 Performance (%) 
       Timeline  
Howard Bancorp 
Howard Performance
0 of 100
Over the last 90 days Howard Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Howard Bancorp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
JP Morgan Chase 
JP Morgan Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in JP Morgan Chase are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady basic indicators, JP Morgan is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

JP Morgan Price Channel

Howard Bancorp and JP Morgan Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Howard Bancorp and JP Morgan

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

Howard Bancorp

Pair trading matchups for Howard Bancorp

The idea behind Howard Bancorp 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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