Correlation Between JPMorgan ETFs and Amundi Index

Can any of the company-specific risk be diversified away by investing in both JPMorgan ETFs and Amundi Index 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 ETFs and Amundi Index into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JPMorgan ETFs ICAV and Amundi Index Solutions, you can compare the effects of market volatilities on JPMorgan ETFs and Amundi Index 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 ETFs with a short position of Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan ETFs and Amundi Index.

Diversification Opportunities for JPMorgan ETFs and Amundi Index

0.68

Correlation Coefficient

JPMorgan ETFs  Amundi Index

Poor diversification

The 3 months correlation between JPMorgan and Amundi is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan ETFs ICAV and Amundi Index Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Index Solutions and JPMorgan 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 JPMorgan ETFs ICAV are associated (or correlated) with Amundi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Index Solutions has no effect on the direction of JPMorgan ETFs i.e., JPMorgan ETFs and Amundi Index go up and down completely randomly.

Pair Corralation between JPMorgan ETFs and Amundi Index

Assuming the 90 days trading horizon JPMorgan ETFs is expected to generate 4.03 times less return on investment than Amundi Index. But when comparing it to its historical volatility, JPMorgan ETFs ICAV is 3.29 times less risky than Amundi Index. It trades about 0.06 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  10,912  in Amundi Index Solutions on October 21, 2024 and sell it today you would earn a total of  778.00  from holding Amundi Index Solutions or generate 7.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

JPMorgan ETFs ICAV  vs.  Amundi Index Solutions

JPMorgan ETFs ICAV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan ETFs ICAV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, JPMorgan ETFs is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Amundi Index Solutions

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Index Solutions are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Amundi Index is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JPMorgan ETFs and Amundi Index

The main advantage of trading using opposite JPMorgan ETFs and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan ETFs position performs unexpectedly, Amundi Index 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 Amundi Index will offset losses from the drop in Amundi Index's long position.

The idea behind JPMorgan ETFs ICAV and Amundi Index Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.