Correlation Between JPMorgan Chase and BankUnited

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

Diversification Opportunities for JPMorgan Chase and BankUnited

0.32
  Correlation Coefficient

Weak diversification

The 3 months correlation between JPMorgan and BankUnited is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and BankUnited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankUnited 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 BankUnited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankUnited has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and BankUnited go up and down completely randomly.

Pair Corralation between JPMorgan Chase and BankUnited

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.52 times more return on investment than BankUnited. However, JPMorgan Chase Co is 1.92 times less risky than BankUnited. It trades about 0.11 of its potential returns per unit of risk. BankUnited is currently generating about 0.06 per unit of risk. If you would invest  13,137  in JPMorgan Chase Co on September 6, 2022 and sell it today you would earn a total of  379.00  from holding JPMorgan Chase Co or generate 2.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

JPMorgan Chase Co  vs.  BankUnited

 Performance (%) 
       Timeline  
JPMorgan Chase 
JPMorgan Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, JPMorgan Chase revealed solid returns over the last few months and may actually be approaching a breakup point.

JPMorgan Price Channel

BankUnited 
BankUnited Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in BankUnited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking signals, BankUnited is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

BankUnited Price Channel

JPMorgan Chase and BankUnited Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JPMorgan Chase and BankUnited

The main advantage of trading using opposite JPMorgan Chase and BankUnited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, BankUnited 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 BankUnited will offset losses from the drop in BankUnited's long position.
JPMorgan Chase vs. East West Bancorp
The idea behind JPMorgan Chase Co and BankUnited 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.
BankUnited vs. Affinity Bancshares
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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