Correlation Between Lithium Energi and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both Lithium Energi 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 Lithium Energi and JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lithium Energi Exploration and JPMorgan Chase Co, you can compare the effects of market volatilities on Lithium Energi 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 Lithium Energi with a short position of JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Energi and JPMorgan Chase.
Diversification Opportunities for Lithium Energi and JPMorgan Chase
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lithium and JPMorgan is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Energi Exploration and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Lithium Energi 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 Lithium Energi Exploration 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 Lithium Energi i.e., Lithium Energi and JPMorgan Chase go up and down completely randomly.
Pair Corralation between Lithium Energi and JPMorgan Chase
Assuming the 90 days horizon Lithium Energi Exploration is expected to generate 4.29 times more return on investment than JPMorgan Chase. However, Lithium Energi is 4.29 times more volatile than JPMorgan Chase Co. It trades about 0.07 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about -0.17 per unit of risk. If you would invest 4.99 in Lithium Energi Exploration on January 21, 2024 and sell it today you would earn a total of 0.28 from holding Lithium Energi Exploration or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lithium Energi Exploration vs. JPMorgan Chase Co
Performance |
| Timeline |
| Lithium Energi Explo |
| JPMorgan Chase |
Lithium Energi and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithium Energi and JPMorgan Chase
The main advantage of trading using opposite Lithium Energi and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium Energi 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.| Lithium Energi vs. Avarone Metals | Lithium Energi vs. Azimut Exploration | Lithium Energi vs. Benton Resources |
| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Wells Fargo | JPMorgan Chase vs. Toronto Dominion Bank | JPMorgan Chase vs. Nu Holdings |
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 the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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