Correlation Between JPMorgan Value and Tidal ETF

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

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

Diversification Opportunities for JPMorgan Value and Tidal ETF

0.78

Correlation Coefficient

JPMorgan Value  Tidal ETF

Poor diversification

The 3 months correlation between JPMorgan and Tidal is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Value Factor 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 JPMorgan Value 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 Value Factor 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 JPMorgan Value i.e., JPMorgan Value and Tidal ETF go up and down completely randomly.

Pair Corralation between JPMorgan Value and Tidal ETF

Given the investment horizon of 90 days JPMorgan Value Factor is expected to generate 0.98 times more return on investment than Tidal ETF. However, JPMorgan Value Factor is 1.02 times less risky than Tidal ETF. It trades about 0.19 of its potential returns per unit of risk. Tidal ETF Trust is currently generating about 0.1 per unit of risk. If you would invest  4,398  in JPMorgan Value Factor on October 27, 2024 and sell it today you would earn a total of  116.00  from holding JPMorgan Value Factor or generate 2.64% return on investment over 90 days.

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

JPMorgan Value Factor  vs.  Tidal ETF Trust

JPMorgan Value Factor

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Value Factor are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. 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.

Tidal ETF Trust

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tidal ETF Trust are ranked lower than 3 (%) 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 JPMorgan Value and Tidal ETF

The main advantage of trading using opposite JPMorgan Value and Tidal ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Value 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 JPMorgan Value Factor 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.