Correlation Between JPMorgan Equity and NEOS Nasdaq
Can any of the company-specific risk be diversified away by investing in both JPMorgan Equity and NEOS Nasdaq 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 Equity and NEOS Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Equity Premium and NEOS Nasdaq 100, you can compare the effects of market volatilities on JPMorgan Equity and NEOS Nasdaq 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 Equity with a short position of NEOS Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Equity and NEOS Nasdaq.
Diversification Opportunities for JPMorgan Equity and NEOS Nasdaq
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JPMorgan and NEOS is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Equity Premium and NEOS Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEOS Nasdaq 100 and JPMorgan Equity 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 Equity Premium are associated (or correlated) with NEOS Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEOS Nasdaq 100 has no effect on the direction of JPMorgan Equity i.e., JPMorgan Equity and NEOS Nasdaq go up and down completely randomly.
Pair Corralation between JPMorgan Equity and NEOS Nasdaq
Given the investment horizon of 90 days JPMorgan Equity is expected to generate 1.03 times less return on investment than NEOS Nasdaq. But when comparing it to its historical volatility, JPMorgan Equity Premium is 1.96 times less risky than NEOS Nasdaq. It trades about 0.18 of its potential returns per unit of risk. NEOS Nasdaq 100 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,700 in NEOS Nasdaq 100 on September 1, 2024 and sell it today you would earn a total of 547.00 from holding NEOS Nasdaq 100 or generate 11.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
JPMorgan Equity Premium vs. NEOS Nasdaq 100
Performance |
| Timeline |
| JPMorgan Equity Premium |
| NEOS Nasdaq 100 |
JPMorgan Equity and NEOS Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Equity and NEOS Nasdaq
The main advantage of trading using opposite JPMorgan Equity and NEOS Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Equity position performs unexpectedly, NEOS Nasdaq 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 NEOS Nasdaq will offset losses from the drop in NEOS Nasdaq's long position.| JPMorgan Equity vs. JPMorgan Nasdaq Equity | JPMorgan Equity vs. Global X NASDAQ | JPMorgan Equity vs. Schwab Dividend Equity | JPMorgan Equity vs. Global X Russell |
| NEOS Nasdaq vs. Global X SP | NEOS Nasdaq vs. Amplify CWP Enhanced | NEOS Nasdaq vs. JPMorgan Equity Premium |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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