Correlation Between JPMorgan Nasdaq and Amplify CWP
Can any of the company-specific risk be diversified away by investing in both JPMorgan Nasdaq and Amplify CWP 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 Nasdaq and Amplify CWP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Nasdaq Equity and Amplify CWP Enhanced, you can compare the effects of market volatilities on JPMorgan Nasdaq and Amplify CWP 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 Nasdaq with a short position of Amplify CWP. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Nasdaq and Amplify CWP.
Diversification Opportunities for JPMorgan Nasdaq and Amplify CWP
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and Amplify is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Nasdaq Equity and Amplify CWP Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify CWP Enhanced and JPMorgan Nasdaq 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 Nasdaq Equity are associated (or correlated) with Amplify CWP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify CWP Enhanced has no effect on the direction of JPMorgan Nasdaq i.e., JPMorgan Nasdaq and Amplify CWP go up and down completely randomly.
Pair Corralation between JPMorgan Nasdaq and Amplify CWP
Given the investment horizon of 90 days JPMorgan Nasdaq Equity is expected to generate 1.41 times more return on investment than Amplify CWP. However, JPMorgan Nasdaq is 1.41 times more volatile than Amplify CWP Enhanced. It trades about 0.12 of its potential returns per unit of risk. Amplify CWP Enhanced is currently generating about 0.16 per unit of risk. If you would invest 4,466 in JPMorgan Nasdaq Equity on August 24, 2024 and sell it today you would earn a total of 1,181 from holding JPMorgan Nasdaq Equity or generate 26.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Nasdaq Equity vs. Amplify CWP Enhanced
Performance |
| Timeline |
| JPMorgan Nasdaq Equity |
| Amplify CWP Enhanced |
JPMorgan Nasdaq and Amplify CWP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Nasdaq and Amplify CWP
The main advantage of trading using opposite JPMorgan Nasdaq and Amplify CWP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Nasdaq position performs unexpectedly, Amplify CWP 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 Amplify CWP will offset losses from the drop in Amplify CWP's long position.| JPMorgan Nasdaq vs. First Trust BuyWrite | JPMorgan Nasdaq vs. Amplify CWP Enhanced | JPMorgan Nasdaq vs. ProShares SP MidCap |
| Amplify CWP vs. NEOS ETF Trust | Amplify CWP vs. Global X SP | Amplify CWP vs. Global X Russell | Amplify CWP 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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