Correlation Between JPMorgan Equity and Amplify ETF

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

Diversification Opportunities for JPMorgan Equity and Amplify ETF

0.49

Correlation Coefficient

JPMorgan Equity  Amplify ETF

Very weak diversification

The 3 months correlation between JPMorgan and Amplify is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Equity Premium and Amplify ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify 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 Amplify ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify ETF Trust has no effect on the direction of JPMorgan Equity i.e., JPMorgan Equity and Amplify ETF go up and down completely randomly.

Pair Corralation between JPMorgan Equity and Amplify ETF

Given the investment horizon of 90 days JPMorgan Equity Premium is expected to generate 0.53 times more return on investment than Amplify ETF. However, JPMorgan Equity Premium is 1.89 times less risky than Amplify ETF. It trades about -0.01 of its potential returns per unit of risk. Amplify ETF Trust is currently generating about -0.1 per unit of risk. If you would invest  5,693  in JPMorgan Equity Premium on December 30, 2024 and sell it today you would lose (25.00) from holding JPMorgan Equity Premium or give up 0.44% of portfolio value over 90 days.

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

JPMorgan Equity Premium  vs.  Amplify 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.

Amplify ETF Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amplify ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with JPMorgan Equity and Amplify ETF

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

The idea behind JPMorgan Equity Premium and Amplify 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.