Correlation Between JPMorgan Nasdaq and NEOS Nasdaq

Can any of the company-specific risk be diversified away by investing in both JPMorgan Nasdaq and NEOS Nasdaq 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 NEOS Nasdaq 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 NEOS Nasdaq 100, you can compare the effects of market volatilities on JPMorgan Nasdaq and NEOS Nasdaq 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 NEOS Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Nasdaq and NEOS Nasdaq.

Diversification Opportunities for JPMorgan Nasdaq and NEOS Nasdaq

0.93

Correlation Coefficient

JPMorgan Nasdaq  NEOS Nasdaq

Almost no diversification

The 3 months correlation between JPMorgan and NEOS is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Nasdaq Equity and NEOS Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEOS Nasdaq 100 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 NEOS Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEOS Nasdaq 100 has no effect on the direction of JPMorgan Nasdaq i.e., JPMorgan Nasdaq and NEOS Nasdaq go up and down completely randomly.

Pair Corralation between JPMorgan Nasdaq and NEOS Nasdaq

Given the investment horizon of 90 days JPMorgan Nasdaq Equity is expected to under-perform the NEOS Nasdaq. In addition to that, JPMorgan Nasdaq Equity is as risky as NEOS Nasdaq. It trades about -0.1 of its total potential returns per unit of risk. NEOS Nasdaq 100 is currently generating about -0.09 per unit of volatility. If you would invest  5,089  in NEOS Nasdaq 100 on December 28, 2024 and sell it today you would lose (345.00) from holding NEOS Nasdaq 100 or give up 6.78% of portfolio value over 90 days.

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

JPMorgan Nasdaq Equity  vs.  NEOS Nasdaq 100

JPMorgan Nasdaq Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPMorgan Nasdaq Equity has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest inconsistent performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

NEOS Nasdaq 100

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEOS Nasdaq 100 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

Pair Trading with JPMorgan Nasdaq and NEOS Nasdaq

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

The idea behind JPMorgan Nasdaq Equity and NEOS Nasdaq 100 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.