Correlation Between JPMorgan Equity and NEOS ETF

Can any of the company-specific risk be diversified away by investing in both JPMorgan Equity and NEOS ETF 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 ETF 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 ETF Trust, you can compare the effects of market volatilities on JPMorgan Equity and NEOS ETF 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 ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Equity and NEOS ETF.

Diversification Opportunities for JPMorgan Equity and NEOS ETF

-0.19

Correlation Coefficient

JPMorgan Equity  NEOS ETF

Good diversification

The 3 months correlation between JPMorgan and NEOS is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Equity Premium and NEOS ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEOS ETF Trust 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 ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEOS ETF Trust has no effect on the direction of JPMorgan Equity i.e., JPMorgan Equity and NEOS ETF go up and down completely randomly.

Pair Corralation between JPMorgan Equity and NEOS ETF

Given the investment horizon of 90 days JPMorgan Equity Premium is expected to under-perform the NEOS ETF. But the etf apears to be less risky and, when comparing its historical volatility, JPMorgan Equity Premium is 20.78 times less risky than NEOS ETF. The etf trades about -0.01 of its potential returns per unit of risk. The NEOS ETF Trust is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,597  in NEOS ETF Trust on December 28, 2024 and sell it today you would earn a total of  2,401  from holding NEOS ETF Trust or generate 92.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.16%
Values	Daily Returns

JPMorgan Equity Premium  vs.  NEOS ETF Trust

JPMorgan Equity Premium

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPMorgan Equity Premium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, JPMorgan Equity is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

NEOS ETF Trust

Risk-Adjusted Performance

OK

Over the last 90 days NEOS ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly unsteady basic indicators, NEOS ETF demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Equity and NEOS ETF

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

The idea behind JPMorgan Equity Premium and NEOS ETF Trust 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.