mb739132 / forage-jpmc-swe-task-1

Starter repo for task 1 of the JPMC software engineering program

JPMC Task 1

Starter repo for task 1 of the JPMC software engineering program

Trader's Dashboard Enhancement: Stock Correlation Monitoring

Overview

This project aims to enhance a trader's dashboard by adding a chart that allows the identification of under/over-valued stocks. The trader will be able to monitor two historically correlated stocks and visualize when the correlation between the two weakens. Such instances may signal a potential trade strategy: simultaneously buying the relatively underperforming stock and selling the relatively outperforming stock. If the two prices subsequently converge, the trade should be profitable.

Technologies Used

• Python 3: The primary programming language for this project. Ensure you have a recent version installed.
• Perspective: JPMorgan Chase's open-source data visualization software, used for interactive charts.
• yfinance: Python library for fetching historical stock data from Yahoo Finance.
• pandas: Data manipulation library for handling and analyzing stock data.
• matplotlib: Plotting library for additional visualizations.
• requests: Library for making HTTP requests to data feeds.

Set-Up

Before you can tackle any software development task, you need to set up your development environment. You can think of your local development environment as a virtual workbench with all the tools necessary to work on your project. To set up your dev environment, follow these instructions:

1. Install Python 3:

   • Ensure Python 3 is installed on your system. Any recent version will work, but the most up-to-date version is advisable.
   • For installation instructions, check out this guide from Real Python: Installing Python.

2. Fork and Clone the Starter Repo:

   • Fork the repository from GitHub: Fork Repository.
   • IMPORTANT: Uncheck the “Copy the main branch only” box in the fork dialog. A model answer is provided in a separate branch from main.
   • Clone the forked repository to your local machine:

     git clone https://github.com/<your-username>/forage-jpmc-swe-task-1.git
     cd forage-jpmc-swe-task-1

3. Open the Project in Your IDE:

   • Open the project in your IDE of choice. If you don't have a preferred Python IDE, consider PyCharm Community Edition by JetBrains. It's powerful, feature-rich, and free.

4. Create a Virtual Environment:

   • Create a new virtual environment in the project root. In PyCharm, you can do this using the “Configure Python Interpreter” option in settings. Alternatively, use the terminal:

     python -m venv venv
     source venv/bin/activate  # On Windows use: venv\Scripts\activate

5. Install Project Dependencies:

   • Install all required dependencies listed in the requirements.txt file:

     pip install -r requirements.txt

Implementation Steps

1. Interface with Financial Data Feed:

   • Connect to the relevant financial data feed.
   • Retrieve and process the data for the two stocks being monitored.

2. Calculate Historical Correlation:

   • Compute the rolling correlation between the two stocks.
   • Identify when the correlation weakens beyond a specified threshold.

3. Visualize the Data:

   • Use Perspective to create an interactive chart.
   • Highlight instances where the stocks deviate from their historical correlation, signaling potential trade opportunities.

Resources

• Perspective Documentation: Perspective GitHub Repository
• Financial Data Feed API: Access a reliable financial data API such as Alpha Vantage, Yahoo Finance, or another service offering historical stock data.