Correlation Between JPMorgan Nasdaq and Tidal Trust

Can any of the company-specific risk be diversified away by investing in both JPMorgan Nasdaq and Tidal Trust 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 Tidal Trust 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 Tidal Trust II, you can compare the effects of market volatilities on JPMorgan Nasdaq and Tidal Trust 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 Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Nasdaq and Tidal Trust.

Diversification Opportunities for JPMorgan Nasdaq and Tidal Trust

0.93

Correlation Coefficient

JPMorgan Nasdaq  Tidal Trust

Almost no diversification

The 3 months correlation between JPMorgan and Tidal is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Nasdaq Equity and Tidal Trust II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust II 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 Tidal Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal Trust II has no effect on the direction of JPMorgan Nasdaq i.e., JPMorgan Nasdaq and Tidal Trust go up and down completely randomly.

Pair Corralation between JPMorgan Nasdaq and Tidal Trust

Given the investment horizon of 90 days JPMorgan Nasdaq is expected to generate 2.24 times less return on investment than Tidal Trust. But when comparing it to its historical volatility, JPMorgan Nasdaq Equity is 2.75 times less risky than Tidal Trust. It trades about 0.24 of its potential returns per unit of risk. Tidal Trust II is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  2,014  in Tidal Trust II on September 3, 2024 and sell it today you would earn a total of  512.00  from holding Tidal Trust II or generate 25.42% 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.  Tidal Trust II

JPMorgan Nasdaq Equity

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Nasdaq Equity are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, JPMorgan Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tidal Trust II

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tidal Trust II are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, Tidal Trust showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Nasdaq and Tidal Trust

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

The idea behind JPMorgan Nasdaq Equity and Tidal Trust II 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.