Correlation Between Tidal ETF and JPMorgan Value

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

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

Diversification Opportunities for Tidal ETF and JPMorgan Value

0.94

Correlation Coefficient

Tidal ETF  JPMorgan Value

Almost no diversification

The 3 months correlation between Tidal and JPMorgan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Tidal ETF Trust and JPMorgan Value Factor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Value Factor and Tidal ETF 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 ETF Trust are associated (or correlated) with JPMorgan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Value Factor has no effect on the direction of Tidal ETF i.e., Tidal ETF and JPMorgan Value go up and down completely randomly.

Pair Corralation between Tidal ETF and JPMorgan Value

Given the investment horizon of 90 days Tidal ETF Trust is expected to under-perform the JPMorgan Value. But the etf apears to be less risky and, when comparing its historical volatility, Tidal ETF Trust is 1.19 times less risky than JPMorgan Value. The etf trades about -0.26 of its potential returns per unit of risk. The JPMorgan Value Factor is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest  4,510  in JPMorgan Value Factor on October 12, 2024 and sell it today you would lose (170.00) from holding JPMorgan Value Factor or give up 3.77% of portfolio value over 90 days.

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

Tidal ETF Trust  vs.  JPMorgan Value Factor

Tidal ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tidal ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

JPMorgan Value Factor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan Value Factor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, JPMorgan Value is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Tidal ETF and JPMorgan Value

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

The idea behind Tidal ETF Trust and JPMorgan Value Factor 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.