Correlation Between Tidal Trust and KraneShares Trust
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and KraneShares Trust 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 KraneShares Trust 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 KraneShares Trust, you can compare the effects of market volatilities on Tidal Trust and KraneShares Trust 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 KraneShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and KraneShares Trust.
Diversification Opportunities for Tidal Trust and KraneShares Trust
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tidal and KraneShares is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and KraneShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Trust 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 KraneShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Trust has no effect on the direction of Tidal Trust i.e., Tidal Trust and KraneShares Trust go up and down completely randomly.
Pair Corralation between Tidal Trust and KraneShares Trust
Given the investment horizon of 90 days Tidal Trust II is expected to generate 79.36 times more return on investment than KraneShares Trust. However, Tidal Trust is 79.36 times more volatile than KraneShares Trust. It trades about 0.1 of its potential returns per unit of risk. KraneShares Trust is currently generating about 0.02 per unit of risk. If you would invest 0.00 in Tidal Trust II on August 27, 2024 and sell it today you would earn a total of 1,377 from holding Tidal Trust II or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 28.62% |
| Values | Daily Returns |
Tidal Trust II vs. KraneShares Trust
Performance |
| Timeline |
| Tidal Trust II |
| KraneShares Trust |
Tidal Trust and KraneShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and KraneShares Trust
The main advantage of trading using opposite Tidal Trust and KraneShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, KraneShares Trust 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 KraneShares Trust will offset losses from the drop in KraneShares Trust's long position.| Tidal Trust vs. Tidal Trust II | Tidal Trust vs. First Trust Dorsey | Tidal Trust vs. Direxion Daily META | Tidal Trust vs. Direxion Daily META |
| KraneShares Trust vs. Invesco PureBeta MSCI | KraneShares Trust vs. Aquagold International | KraneShares Trust vs. Morningstar Unconstrained Allocation | KraneShares Trust vs. High Yield Municipal Fund |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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