Correlation Between Tidal Trust and BTCI
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and BTCI 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 BTCI 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 BTCI, you can compare the effects of market volatilities on Tidal Trust and BTCI 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 BTCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and BTCI.
Diversification Opportunities for Tidal Trust and BTCI
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tidal and BTCI is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and BTCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTCI 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 BTCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTCI has no effect on the direction of Tidal Trust i.e., Tidal Trust and BTCI go up and down completely randomly.
Pair Corralation between Tidal Trust and BTCI
Given the investment horizon of 90 days Tidal Trust is expected to generate 3.34 times less return on investment than BTCI. But when comparing it to its historical volatility, Tidal Trust II is 1.51 times less risky than BTCI. It trades about 0.11 of its potential returns per unit of risk. BTCI is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 5,874 in BTCI on October 22, 2024 and sell it today you would earn a total of 681.00 from holding BTCI or generate 11.59% 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. BTCI
Performance |
| Timeline |
| Tidal Trust II |
| BTCI |
Tidal Trust and BTCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and BTCI
The main advantage of trading using opposite Tidal Trust and BTCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, BTCI 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 BTCI will offset losses from the drop in BTCI's long position.| Tidal Trust vs. Vanguard Total Stock | Tidal Trust vs. SPDR SP 500 | Tidal Trust vs. iShares Core SP | Tidal Trust vs. Vanguard Total Bond |
| BTCI vs. Tidal Trust II | BTCI vs. Tidal Trust II | BTCI vs. First Trust Dorsey | BTCI vs. Direxion Daily META |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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