Correlation Between Tidal Trust and YieldMax MSTR
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and YieldMax MSTR 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 YieldMax MSTR 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 YieldMax MSTR Option, you can compare the effects of market volatilities on Tidal Trust and YieldMax MSTR 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 YieldMax MSTR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and YieldMax MSTR.
Diversification Opportunities for Tidal Trust and YieldMax MSTR
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tidal and YieldMax is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and YieldMax MSTR Option in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YieldMax MSTR Option 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 YieldMax MSTR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YieldMax MSTR Option has no effect on the direction of Tidal Trust i.e., Tidal Trust and YieldMax MSTR go up and down completely randomly.
Pair Corralation between Tidal Trust and YieldMax MSTR
Given the investment horizon of 90 days Tidal Trust II is expected to under-perform the YieldMax MSTR. But the etf apears to be less risky and, when comparing its historical volatility, Tidal Trust II is 4.39 times less risky than YieldMax MSTR. The etf trades about -0.13 of its potential returns per unit of risk. The YieldMax MSTR Option is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,384 in YieldMax MSTR Option on August 24, 2024 and sell it today you would earn a total of 1,201 from holding YieldMax MSTR Option or generate 50.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tidal Trust II vs. YieldMax MSTR Option
Performance |
| Timeline |
| Tidal Trust II |
| YieldMax MSTR Option |
Tidal Trust and YieldMax MSTR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and YieldMax MSTR
The main advantage of trading using opposite Tidal Trust and YieldMax MSTR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, YieldMax MSTR 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 YieldMax MSTR will offset losses from the drop in YieldMax MSTR'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 |
| YieldMax MSTR vs. Tidal Trust II | YieldMax MSTR vs. Tidal Trust II | YieldMax MSTR vs. First Trust Dorsey | YieldMax MSTR 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |