Correlation Between Oakmark International and JPMorgan Chase

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

Diversification Opportunities for Oakmark International and JPMorgan Chase

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Oakmark and JPMorgan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark International Small and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Oakmark International 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 Oakmark International Small are associated (or correlated) with JPMorgan Chase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Chase has no effect on the direction of Oakmark International i.e., Oakmark International and JPMorgan Chase go up and down completely randomly.

Pair Corralation between Oakmark International and JPMorgan Chase

Assuming the 90 days horizon Oakmark International Small is expected to generate 1.31 times more return on investment than JPMorgan Chase. However, Oakmark International is 1.31 times more volatile than JPMorgan Chase Co. It trades about 0.25 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.04 per unit of risk. If you would invest  1,525  in Oakmark International Small on September 9, 2022 and sell it today you would earn a total of  163.00  from holding Oakmark International Small or generate 10.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Oakmark International Small  vs.  JPMorgan Chase Co

 Performance (%) 
       Timeline  
Oakmark International 
Oakmark Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Oakmark International Small are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Oakmark International showed solid returns over the last few months and may actually be approaching a breakup point.

Oakmark Price Channel

JPMorgan Chase 
JPMorgan Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 7 (%) 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

Oakmark International and JPMorgan Chase Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oakmark International and JPMorgan Chase

The main advantage of trading using opposite Oakmark International and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark International position performs unexpectedly, JPMorgan Chase 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 JPMorgan Chase will offset losses from the drop in JPMorgan Chase's long position.
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The idea behind Oakmark International Small and JPMorgan Chase Co 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.
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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