INTERNATIONAL JOURNAL OF ENGINEERING MANAGEMENT AND
SOCIAL SCIENCES

Comparative Evaluation of Risk and Return in Investment Portfolios of Selected Banking Companies: JPMorgan Chase, Barclays, and Bank of America

The relationship between risk and return is the central principle governing all investment decisions. This article presents a comparative evaluation of the risk and return characteristics of the investment portfolios of three of the world's leading banking companies — JPMorgan Chase, Barclays, and Bank of America — over five financial years from FY2020–21 to FY2024–25. The objective is to analyse and compare returns, measure risk (standard deviation and beta), evaluate risk-adjusted performance (using the Sharpe Ratio, Treynor Ratio, and Jensen's Alpha), and examine the correlation between the three banking stocks to assess their diversification potential. The study is analytical, quantitative, and comparative in nature, relying entirely on secondary data drawn from historical share prices, market index data (S&P 500 and FTSE 100), and risk-free rate data. Statistical tools including mean return, standard deviation, beta, the Capital Asset Pricing Model, risk-adjusted performance ratios, and correlation analysis have been applied across twelve analytical tables. The study period captures the COVID-19 pandemic, the post-pandemic recovery, the aggressive interest rate hike cycle of 2022–23, and the regional banking turmoil of 2023 — a uniquely turbulent window for banking stocks. The findings reveal that JPMorgan Chase delivered the strongest risk-adjusted performance among the three banks, supported by its diversified earnings and disciplined risk management, while maintaining moderate volatility. Bank of America offered competitive returns with the highest sensitivity to interest rate movements, and Barclays exhibited the highest raw return alongside the highest volatility, reflecting greater UK economic and conduct-related risks. The correlation analysis showed moderate-to-high correlation among the three stocks, with the US–UK pairings offering greater diversification benefit than the two US banks combined. The study concludes that JPMorgan Chase offered the most attractive risk-adjusted return over the study period and provides recommendations for investors on banking-sector portfolio construction.