Correlation Between SP 500 and JPMorgan ETFs

Can any of the company-specific risk be diversified away by investing in both SP 500 and JPMorgan ETFs 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 SP 500 and JPMorgan ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SP 500 VIX and JPMorgan ETFs ICAV, you can compare the effects of market volatilities on SP 500 and JPMorgan ETFs 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 SP 500 with a short position of JPMorgan ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP 500 and JPMorgan ETFs.

Diversification Opportunities for SP 500 and JPMorgan ETFs

-0.79

Correlation Coefficient

SP 500  JPMorgan ETFs

Pay attention - limited upside

The 3 months correlation between VILX and JPMorgan is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding SP 500 VIX and JPMorgan ETFs ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan ETFs ICAV and SP 500 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 SP 500 VIX are associated (or correlated) with JPMorgan ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan ETFs ICAV has no effect on the direction of SP 500 i.e., SP 500 and JPMorgan ETFs go up and down completely randomly.

Pair Corralation between SP 500 and JPMorgan ETFs

Assuming the 90 days trading horizon SP 500 VIX is expected to generate 9.25 times more return on investment than JPMorgan ETFs. However, SP 500 is 9.25 times more volatile than JPMorgan ETFs ICAV. It trades about 0.02 of its potential returns per unit of risk. JPMorgan ETFs ICAV is currently generating about -0.08 per unit of risk. If you would invest  186,620  in SP 500 VIX on December 22, 2024 and sell it today you would lose (20,514) from holding SP 500 VIX or give up 10.99% of portfolio value over 90 days.

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

SP 500 VIX  vs.  JPMorgan ETFs ICAV

SP 500 VIX

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SP 500 VIX are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SP 500 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

JPMorgan ETFs ICAV

Risk-Adjusted Performance

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 comparatively stable basic indicators, JPMorgan ETFs is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SP 500 and JPMorgan ETFs

The main advantage of trading using opposite SP 500 and JPMorgan ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP 500 position performs unexpectedly, JPMorgan ETFs 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 JPMorgan ETFs will offset losses from the drop in JPMorgan ETFs' long position.

The idea behind SP 500 VIX and JPMorgan ETFs ICAV 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.