Correlation Between Innovator ETFs and JPMorgan Momentum
Can any of the company-specific risk be diversified away by investing in both Innovator ETFs and JPMorgan Momentum 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 Innovator ETFs and JPMorgan Momentum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovator ETFs Trust and JPMorgan Momentum Factor, you can compare the effects of market volatilities on Innovator ETFs and JPMorgan Momentum 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 Innovator ETFs with a short position of JPMorgan Momentum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator ETFs and JPMorgan Momentum.
Diversification Opportunities for Innovator ETFs and JPMorgan Momentum
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Innovator and JPMorgan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and JPMorgan Momentum Factor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Momentum Factor and Innovator ETFs 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 Innovator ETFs Trust are associated (or correlated) with JPMorgan Momentum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Momentum Factor has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and JPMorgan Momentum go up and down completely randomly.
Pair Corralation between Innovator ETFs and JPMorgan Momentum
Given the investment horizon of 90 days Innovator ETFs Trust is expected to generate 0.49 times more return on investment than JPMorgan Momentum. However, Innovator ETFs Trust is 2.05 times less risky than JPMorgan Momentum. It trades about 0.03 of its potential returns per unit of risk. JPMorgan Momentum Factor is currently generating about -0.05 per unit of risk. If you would invest 2,990 in Innovator ETFs Trust on November 27, 2024 and sell it today you would earn a total of 8.00 from holding Innovator ETFs Trust or generate 0.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator ETFs Trust vs. JPMorgan Momentum Factor
Performance |
| Timeline |
| Innovator ETFs Trust |
| JPMorgan Momentum Factor |
Innovator ETFs and JPMorgan Momentum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator ETFs and JPMorgan Momentum
The main advantage of trading using opposite Innovator ETFs and JPMorgan Momentum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator ETFs position performs unexpectedly, JPMorgan Momentum 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 JPMorgan Momentum will offset losses from the drop in JPMorgan Momentum's long position.| Innovator ETFs vs. Innovator Equity Accelerated | Innovator ETFs vs. Innovator Equity Accelerated | Innovator ETFs vs. Innovator Growth 100 Accelerated | Innovator ETFs vs. Innovator ETFs Trust |
| JPMorgan Momentum vs. JPMorgan Quality Factor | JPMorgan Momentum vs. JPMorgan Value Factor | JPMorgan Momentum vs. JPMorgan Diversified Return | JPMorgan Momentum vs. JPMorgan Diversified Return |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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