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

0.99

Correlation Coefficient

JPMorgan Nasdaq  NEOS Nasdaq

No risk reduction

The 3 months correlation between JPMorgan and NEOS is 0.99. 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 is expected to generate 10.92 times less return on investment than NEOS Nasdaq. But when comparing it to its historical volatility, JPMorgan Nasdaq Equity is 1.01 times less risky than NEOS Nasdaq. It trades about 0.0 of its potential returns per unit of risk. NEOS Nasdaq 100 is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  5,103  in NEOS Nasdaq 100 on December 1, 2024 and sell it today you would earn a total of  28.00  from holding NEOS Nasdaq 100 or generate 0.55% return on investment 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 relatively invariable basic indicators, JPMorgan Nasdaq is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

NEOS Nasdaq 100

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NEOS Nasdaq 100 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, NEOS Nasdaq is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..