Correlation Between JPMorgan Chase and Sokoman Minerals

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

Diversification Opportunities for JPMorgan Chase and Sokoman Minerals

-0.22

Correlation Coefficient

JPMorgan Chase  Sokoman Minerals

Very good diversification

The 3 months correlation between JPMorgan and Sokoman is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Sokoman Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sokoman Minerals Corp 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 Sokoman Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sokoman Minerals Corp has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Sokoman Minerals go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Sokoman Minerals

Considering the 90-day investment horizon JPMorgan Chase Co is expected to generate 0.18 times more return on investment than Sokoman Minerals. However, JPMorgan Chase Co is 5.47 times less risky than Sokoman Minerals. It trades about 0.1 of its potential returns per unit of risk. Sokoman Minerals Corp is currently generating about -0.01 per unit of risk. If you would invest  12,619  in JPMorgan Chase Co on August 12, 2024 and sell it today you would earn a total of  11,079  from holding JPMorgan Chase Co or generate 87.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

JPMorgan Chase Co  vs.  Sokoman Minerals Corp

JPMorgan Chase

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.

Sokoman Minerals Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sokoman Minerals Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Sokoman Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and Sokoman Minerals

The main advantage of trading using opposite JPMorgan Chase and Sokoman Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Sokoman Minerals 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 Sokoman Minerals will offset losses from the drop in Sokoman Minerals' long position.

The idea behind JPMorgan Chase Co and Sokoman Minerals Corp 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.