Correlation Between JP Morgan and American Beacon

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both JP Morgan 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 JP Morgan and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JP Morgan Chase and American Beacon Mid-Cap, you can compare the effects of market volatilities on JP Morgan 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 JP Morgan with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of JP Morgan and American Beacon.

Diversification Opportunities for JP Morgan and American Beacon

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between JP Morgan and American is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding JP Morgan Chase 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 JP Morgan 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 JP Morgan Chase 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 JP Morgan i.e., JP Morgan and American Beacon go up and down completely randomly.

Pair Corralation between JP Morgan and American Beacon

Considering the 90-day investment horizon JP Morgan Chase is expected to generate 1.17 times more return on investment than American Beacon. However, JP Morgan is 1.17 times more volatile than American Beacon Mid-Cap. It trades about 0.03 of its potential returns per unit of risk. American Beacon Mid-Cap is currently generating about 0.03 per unit of risk. If you would invest  9,450  in JP Morgan Chase on June 27, 2022 and sell it today you would earn a total of  1,464  from holding JP Morgan Chase or generate 15.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy99.8%
ValuesDaily Returns

JP Morgan Chase  vs.  American Beacon Mid-Cap

 Performance (%) 
       Timeline  
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 current stock price chaos, may contribute to medium-term losses for the stakeholders.

JP Morgan 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 strong basic indicators, American Beacon is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

American Price Channel

JP Morgan and American Beacon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JP Morgan and American Beacon

The main advantage of trading using opposite JP Morgan and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JP Morgan 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.
JP Morgan vs. China Construction B
The idea behind JP Morgan Chase 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.
American Beacon vs. ATT 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

Other Complementary Tools

Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Shere Portfolio
Track or share privately all of your investments from the convenience of any device
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go