Correlation Between DSJA and Tidal Commodities

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

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

Diversification Opportunities for DSJA and Tidal Commodities

0.0

Correlation Coefficient

DSJA  Tidal Commodities

Pay attention - limited upside

The 3 months correlation between DSJA and Tidal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DSJA and Tidal Commodities Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Commodities Trust and DSJA 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 DSJA are associated (or correlated) with Tidal Commodities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal Commodities Trust has no effect on the direction of DSJA i.e., DSJA and Tidal Commodities go up and down completely randomly.

Pair Corralation between DSJA and Tidal Commodities

If you would invest (100.00) in DSJA on December 28, 2024 and sell it today you would earn a total of  100.00  from holding DSJA or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

DSJA  vs.  Tidal Commodities Trust

DSJA

Risk-Adjusted Performance

Very Weak

Over the last 90 days DSJA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking indicators, DSJA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Tidal Commodities Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tidal Commodities Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Tidal Commodities is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with DSJA and Tidal Commodities

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

The idea behind DSJA and Tidal Commodities 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.

Check out your portfolio center.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.