Correlation Between JP Morgan and Tidal ETF

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

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

Diversification Opportunities for JP Morgan and Tidal ETF

0.85

Correlation Coefficient

JP Morgan  Tidal ETF

Very poor diversification

The 3 months correlation between JCTR and Tidal is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding JP Morgan Exchange Traded and Tidal ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal ETF Trust and JP Morgan 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 JP Morgan Exchange Traded are associated (or correlated) with Tidal ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal ETF Trust has no effect on the direction of JP Morgan i.e., JP Morgan and Tidal ETF go up and down completely randomly.

Pair Corralation between JP Morgan and Tidal ETF

Given the investment horizon of 90 days JP Morgan Exchange Traded is expected to under-perform the Tidal ETF. In addition to that, JP Morgan is 1.35 times more volatile than Tidal ETF Trust. It trades about -0.06 of its total potential returns per unit of risk. Tidal ETF Trust is currently generating about 0.02 per unit of volatility. If you would invest  1,835  in Tidal ETF Trust on December 18, 2024 and sell it today you would earn a total of  13.00  from holding Tidal ETF Trust or generate 0.71% return on investment over 90 days.

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

JP Morgan Exchange Traded  vs.  Tidal ETF Trust

JP Morgan Exchange

Risk-Adjusted Performance

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. Even with relatively invariable basic indicators, JP Morgan is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Tidal ETF Trust

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tidal ETF Trust are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Tidal ETF is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with JP Morgan and Tidal ETF

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

The idea behind JP Morgan Exchange Traded and Tidal ETF 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.