Correlation Between Tidal Trust and Themes Airlines
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and Themes Airlines 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 Trust and Themes Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tidal Trust II and Themes Airlines ETF, you can compare the effects of market volatilities on Tidal Trust and Themes Airlines 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 Trust with a short position of Themes Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and Themes Airlines.
Diversification Opportunities for Tidal Trust and Themes Airlines
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tidal and Themes is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and Themes Airlines ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themes Airlines ETF and Tidal Trust 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 Trust II are associated (or correlated) with Themes Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themes Airlines ETF has no effect on the direction of Tidal Trust i.e., Tidal Trust and Themes Airlines go up and down completely randomly.
Pair Corralation between Tidal Trust and Themes Airlines
Given the investment horizon of 90 days Tidal Trust II is expected to under-perform the Themes Airlines. But the etf apears to be less risky and, when comparing its historical volatility, Tidal Trust II is 1.07 times less risky than Themes Airlines. The etf trades about -0.09 of its potential returns per unit of risk. The Themes Airlines ETF is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,547 in Themes Airlines ETF on September 1, 2024 and sell it today you would earn a total of 417.00 from holding Themes Airlines ETF or generate 16.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Tidal Trust II vs. Themes Airlines ETF
Performance |
| Timeline |
| Tidal Trust II |
| Themes Airlines ETF |
Tidal Trust and Themes Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and Themes Airlines
The main advantage of trading using opposite Tidal Trust and Themes Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, Themes Airlines 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 Themes Airlines will offset losses from the drop in Themes Airlines' long position.The idea behind Tidal Trust II and Themes Airlines ETF 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.| Themes Airlines vs. First Trust Exchange Traded | Themes Airlines vs. Ultimus Managers Trust | Themes Airlines vs. Horizon Kinetics Medical | Themes Airlines vs. Harbor Health Care |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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