Correlation Between JP Morgan and Postal Svgs

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

Diversification Opportunities for JP Morgan and Postal Svgs

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between JP Morgan and Postal is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding JP Morgan Chase and Postal Svgs Bk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Svgs Bk 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 Postal Svgs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Svgs Bk has no effect on the direction of JP Morgan i.e., JP Morgan and Postal Svgs go up and down completely randomly.

Pair Corralation between JP Morgan and Postal Svgs

Considering the 90-day investment horizon JP Morgan Chase is expected to generate 0.63 times more return on investment than Postal Svgs. However, JP Morgan Chase is 1.58 times less risky than Postal Svgs. It trades about 0.21 of its potential returns per unit of risk. Postal Svgs Bk is currently generating about -0.13 per unit of risk. If you would invest  11,454  in JP Morgan Chase on May 21, 2022 and sell it today you would earn a total of  710.00  from holding JP Morgan Chase or generate 6.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

JP Morgan Chase  vs.  Postal Svgs Bk

 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 latest stock price chaos, may contribute to medium-term losses for the stakeholders.

JP Morgan Price Channel

Postal Svgs Bk 
Postal Performance
0 of 100
Over the last 90 days Postal Svgs Bk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Postal Price Channel

JP Morgan and Postal Svgs Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with JP Morgan and Postal Svgs

The main advantage of trading using opposite JP Morgan and Postal Svgs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JP Morgan position performs unexpectedly, Postal Svgs 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 Postal Svgs will offset losses from the drop in Postal Svgs' long position.
The idea behind JP Morgan Chase and Postal Svgs Bk 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.

Postal Svgs Bk

Pair trading matchups for Postal Svgs

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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

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