Correlation Between Tidal Trust and YieldMax N
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and YieldMax N 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 N 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 N Option, you can compare the effects of market volatilities on Tidal Trust and YieldMax N 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 N. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and YieldMax N.
Diversification Opportunities for Tidal Trust and YieldMax N
0.87 | Correlation Coefficient |
Very poor diversification
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 N Option in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YieldMax N 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 N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YieldMax N Option has no effect on the direction of Tidal Trust i.e., Tidal Trust and YieldMax N go up and down completely randomly.
Pair Corralation between Tidal Trust and YieldMax N
Given the investment horizon of 90 days Tidal Trust is expected to generate 5.04 times less return on investment than YieldMax N. But when comparing it to its historical volatility, Tidal Trust II is 3.11 times less risky than YieldMax N. It trades about 0.06 of its potential returns per unit of risk. YieldMax N Option is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 632.00 in YieldMax N Option on August 29, 2024 and sell it today you would earn a total of 991.00 from holding YieldMax N Option or generate 156.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.54% |
| Values | Daily Returns |
Tidal Trust II vs. YieldMax N Option
Performance |
| Timeline |
| Tidal Trust II |
| YieldMax N Option |
Tidal Trust and YieldMax N Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and YieldMax N
The main advantage of trading using opposite Tidal Trust and YieldMax N positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, YieldMax N 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 N will offset losses from the drop in YieldMax N'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 N vs. Tidal Trust II | YieldMax N vs. Tidal Trust II | YieldMax N vs. First Trust Dorsey | YieldMax N 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |