Correlation Between Tidal Trust and Exchange Traded
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and Exchange Traded 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 Exchange Traded 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 Exchange Traded Concepts, you can compare the effects of market volatilities on Tidal Trust and Exchange Traded 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 Exchange Traded. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and Exchange Traded.
Diversification Opportunities for Tidal Trust and Exchange Traded
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tidal and Exchange is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and Exchange Traded Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Traded Concepts 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 Exchange Traded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Traded Concepts has no effect on the direction of Tidal Trust i.e., Tidal Trust and Exchange Traded go up and down completely randomly.
Pair Corralation between Tidal Trust and Exchange Traded
Given the investment horizon of 90 days Tidal Trust II is expected to generate 1.81 times more return on investment than Exchange Traded. However, Tidal Trust is 1.81 times more volatile than Exchange Traded Concepts. It trades about 0.06 of its potential returns per unit of risk. Exchange Traded Concepts is currently generating about 0.01 per unit of risk. If you would invest 1,428 in Tidal Trust II on August 26, 2024 and sell it today you would earn a total of 313.00 from holding Tidal Trust II or generate 21.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 50.32% |
| Values | Daily Returns |
Tidal Trust II vs. Exchange Traded Concepts
Performance |
| Timeline |
| Tidal Trust II |
| Exchange Traded Concepts |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tidal Trust and Exchange Traded Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and Exchange Traded
The main advantage of trading using opposite Tidal Trust and Exchange Traded positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, Exchange Traded 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 Exchange Traded will offset losses from the drop in Exchange Traded'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 |
| Exchange Traded vs. Argent Mid Cap | Exchange Traded vs. Calumet Specialty Products | Exchange Traded vs. Loop Industries | Exchange Traded vs. Hurco Companies |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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