Correlation Between Tidal Trust and Xtrackers Russell
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and Xtrackers Russell 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 Xtrackers Russell 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 Xtrackers Russell Multifactor, you can compare the effects of market volatilities on Tidal Trust and Xtrackers Russell 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 Xtrackers Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and Xtrackers Russell.
Diversification Opportunities for Tidal Trust and Xtrackers Russell
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tidal and Xtrackers is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and Xtrackers Russell Multifactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Russell 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 Xtrackers Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Russell has no effect on the direction of Tidal Trust i.e., Tidal Trust and Xtrackers Russell go up and down completely randomly.
Pair Corralation between Tidal Trust and Xtrackers Russell
Given the investment horizon of 90 days Tidal Trust II is expected to generate 1.86 times more return on investment than Xtrackers Russell. However, Tidal Trust is 1.86 times more volatile than Xtrackers Russell Multifactor. It trades about 0.35 of its potential returns per unit of risk. Xtrackers Russell Multifactor is currently generating about 0.38 per unit of risk. If you would invest 1,582 in Tidal Trust II on September 1, 2024 and sell it today you would earn a total of 191.00 from holding Tidal Trust II or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tidal Trust II vs. Xtrackers Russell Multifactor
Performance |
| Timeline |
| Tidal Trust II |
| Xtrackers Russell |
Tidal Trust and Xtrackers Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and Xtrackers Russell
The main advantage of trading using opposite Tidal Trust and Xtrackers Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, Xtrackers Russell 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 Xtrackers Russell will offset losses from the drop in Xtrackers Russell's long position.| Tidal Trust vs. Tidal Trust II | Tidal Trust vs. Direxion Daily META | Tidal Trust vs. Direxion Daily META | Tidal Trust vs. Tidal Trust II |
| Xtrackers Russell vs. Xtrackers FTSE Developed | Xtrackers Russell vs. John Hancock Multifactor | Xtrackers Russell vs. Xtrackers MSCI All | Xtrackers Russell vs. Xtrackers MSCI Eurozone |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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