Correlation Between Tidal Trust and IShares Core
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and IShares Core 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 IShares Core 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 iShares Core SP, you can compare the effects of market volatilities on Tidal Trust and IShares Core 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 IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and IShares Core.
Diversification Opportunities for Tidal Trust and IShares Core
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tidal and IShares is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and iShares Core SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core SP 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 IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core SP has no effect on the direction of Tidal Trust i.e., Tidal Trust and IShares Core go up and down completely randomly.
Pair Corralation between Tidal Trust and IShares Core
Given the investment horizon of 90 days Tidal Trust II is expected to under-perform the IShares Core. But the etf apears to be less risky and, when comparing its historical volatility, Tidal Trust II is 1.32 times less risky than IShares Core. The etf trades about -0.02 of its potential returns per unit of risk. The iShares Core SP is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9,298 in iShares Core SP on August 27, 2024 and sell it today you would earn a total of 3,207 from holding iShares Core SP or generate 34.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tidal Trust II vs. iShares Core SP
Performance |
| Timeline |
| Tidal Trust II |
| iShares Core SP |
Tidal Trust and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and IShares Core
The main advantage of trading using opposite Tidal Trust and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core's long position.The idea behind Tidal Trust II and iShares Core SP 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.| IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares SP Small Cap | IShares Core vs. iShares SP 500 |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |