Correlation Between IShares Agency and Tidal ETF
Can any of the company-specific risk be diversified away by investing in both IShares Agency 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 IShares Agency and Tidal ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Agency Bond and Tidal ETF Trust, you can compare the effects of market volatilities on IShares Agency 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 IShares Agency with a short position of Tidal ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Agency and Tidal ETF.
Diversification Opportunities for IShares Agency and Tidal ETF
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Tidal is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding iShares Agency Bond 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 IShares Agency 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 iShares Agency Bond 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 IShares Agency i.e., IShares Agency and Tidal ETF go up and down completely randomly.
Pair Corralation between IShares Agency and Tidal ETF
Considering the 90-day investment horizon IShares Agency is expected to generate 4.08 times less return on investment than Tidal ETF. In addition to that, IShares Agency is 1.26 times more volatile than Tidal ETF Trust. It trades about 0.07 of its total potential returns per unit of risk. Tidal ETF Trust is currently generating about 0.35 per unit of volatility. If you would invest 1,849 in Tidal ETF Trust on November 27, 2024 and sell it today you would earn a total of 58.00 from holding Tidal ETF Trust or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Agency Bond vs. Tidal ETF Trust
Performance |
| Timeline |
| iShares Agency Bond |
| Tidal ETF Trust |
IShares Agency and Tidal ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Agency and Tidal ETF
The main advantage of trading using opposite IShares Agency and Tidal ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Agency 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.| IShares Agency vs. iShares Intermediate GovernmentCredit | IShares Agency vs. iShares GovernmentCredit Bond | IShares Agency vs. iShares New York | IShares Agency vs. iShares California Muni |
| Tidal ETF vs. Strategy Shares | Tidal ETF vs. Freedom Day Dividend | Tidal ETF vs. Franklin Templeton ETF | Tidal ETF vs. iShares MSCI China |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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