Correlation Between Tidal Trust and JP Morgan

Can any of the company-specific risk be diversified away by investing in both Tidal Trust and JP Morgan 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 Tidal Trust and JP Morgan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tidal Trust II and JP Morgan Exchange Traded, you can compare the effects of market volatilities on Tidal Trust and JP Morgan 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 Tidal Trust with a short position of JP Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and JP Morgan.

Diversification Opportunities for Tidal Trust and JP Morgan

0.61

Correlation Coefficient

Tidal Trust  JP Morgan

Poor diversification

The 3 months correlation between Tidal and BLLD is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and JP Morgan Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JP Morgan Exchange and Tidal Trust 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 Tidal Trust II are associated (or correlated) with JP Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JP Morgan Exchange has no effect on the direction of Tidal Trust i.e., Tidal Trust and JP Morgan go up and down completely randomly.

Pair Corralation between Tidal Trust and JP Morgan

Given the investment horizon of 90 days Tidal Trust II is expected to generate 1.75 times more return on investment than JP Morgan. However, Tidal Trust is 1.75 times more volatile than JP Morgan Exchange Traded. It trades about 0.02 of its potential returns per unit of risk. JP Morgan Exchange Traded is currently generating about -0.04 per unit of risk. If you would invest  1,410  in Tidal Trust II on August 30, 2024 and sell it today you would earn a total of  6.00  from holding Tidal Trust II or generate 0.43% return on investment over 90 days.

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

Tidal Trust II  vs.  JP Morgan Exchange Traded

Tidal Trust II

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tidal Trust II has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

JP Morgan Exchange

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JP Morgan Exchange Traded has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, JP Morgan is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Tidal Trust and JP Morgan

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

The idea behind Tidal Trust II and JP Morgan Exchange Traded 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.