Correlation Between JPMorgan Chase and First National

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

Diversification Opportunities for JPMorgan Chase and First National

0.7

Correlation Coefficient

JPMorgan Chase  First National

Poor diversification

The 3 months correlation between JPMorgan and First is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and First National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First National Financial 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 National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First National Financial has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and First National go up and down completely randomly.

Pair Corralation between JPMorgan Chase and First National

Assuming the 90 days trading horizon JPMorgan Chase Co is expected to generate 1.1 times more return on investment than First National. However, JPMorgan Chase is 1.1 times more volatile than First National Financial. It trades about 0.32 of its potential returns per unit of risk. First National Financial is currently generating about 0.16 per unit of risk. If you would invest  2,994  in JPMorgan Chase Co on April 20, 2025 and sell it today you would earn a total of  820.00  from holding JPMorgan Chase Co or generate 27.39% return on investment over 90 days.

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

JPMorgan Chase Co  vs.  First National Financial

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 25 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.

First National Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First National Financial are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, First National may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with JPMorgan Chase and First National

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

The idea behind JPMorgan Chase Co and First National Financial 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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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.