Correlation Between Tidal Trust and FundX ETF
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and FundX ETF 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 FundX ETF 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 FundX ETF, you can compare the effects of market volatilities on Tidal Trust and FundX ETF 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 FundX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and FundX ETF.
Diversification Opportunities for Tidal Trust and FundX ETF
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tidal and FundX is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and FundX ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX 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 FundX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX ETF has no effect on the direction of Tidal Trust i.e., Tidal Trust and FundX ETF go up and down completely randomly.
Pair Corralation between Tidal Trust and FundX ETF
Given the investment horizon of 90 days Tidal Trust II is expected to under-perform the FundX ETF. In addition to that, Tidal Trust is 2.61 times more volatile than FundX ETF. It trades about -0.06 of its total potential returns per unit of risk. FundX ETF is currently generating about -0.1 per unit of volatility. If you would invest 7,271 in FundX ETF on December 3, 2024 and sell it today you would lose (157.00) from holding FundX ETF or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Tidal Trust II vs. FundX ETF
Performance |
| Timeline |
| Tidal Trust II |
| FundX ETF |
Tidal Trust and FundX ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and FundX ETF
The main advantage of trading using opposite Tidal Trust and FundX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, FundX ETF 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 FundX ETF will offset losses from the drop in FundX ETF's long position.| Tidal Trust vs. Strategy Shares | Tidal Trust vs. Freedom Day Dividend | Tidal Trust vs. Franklin Templeton ETF | Tidal Trust vs. iShares MSCI China |
| FundX ETF vs. Strategy Shares | FundX ETF vs. Freedom Day Dividend | FundX ETF vs. Franklin Templeton ETF | FundX ETF vs. iShares MSCI China |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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