Correlation Between JPMorgan Chase and First Quantum

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

Diversification Opportunities for JPMorgan Chase and First Quantum

0.97

Correlation Coefficient

JPMorgan Chase  First Quantum

Almost no diversification

The 3 months correlation between JPMorgan and First is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and First Quantum Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Quantum Minerals 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 First Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Quantum Minerals has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and First Quantum go up and down completely randomly.

Pair Corralation between JPMorgan Chase and First Quantum

Assuming the 90 days trading horizon JPMorgan Chase is expected to generate 1.26 times less return on investment than First Quantum. But when comparing it to its historical volatility, JPMorgan Chase Co is 1.67 times less risky than First Quantum. It trades about 0.28 of its potential returns per unit of risk. First Quantum Minerals is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,917  in First Quantum Minerals on April 25, 2025 and sell it today you would earn a total of  517.00  from holding First Quantum Minerals or generate 26.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

JPMorgan Chase Co  vs.  First Quantum Minerals

JPMorgan Chase

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.

First Quantum Minerals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Quantum Minerals are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, First Quantum displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and First Quantum

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

The idea behind JPMorgan Chase Co and First Quantum Minerals 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.