Correlation Between Tidal Trust and Dimensional ETF
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and Dimensional 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 Dimensional 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 Dimensional ETF Trust, you can compare the effects of market volatilities on Tidal Trust and Dimensional 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 Dimensional ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and Dimensional ETF.
Diversification Opportunities for Tidal Trust and Dimensional ETF
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tidal and Dimensional is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and Dimensional ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional ETF Trust 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 Dimensional ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional ETF Trust has no effect on the direction of Tidal Trust i.e., Tidal Trust and Dimensional ETF go up and down completely randomly.
Pair Corralation between Tidal Trust and Dimensional ETF
Given the investment horizon of 90 days Tidal Trust II is expected to generate 1.37 times more return on investment than Dimensional ETF. However, Tidal Trust is 1.37 times more volatile than Dimensional ETF Trust. It trades about 0.04 of its potential returns per unit of risk. Dimensional ETF Trust is currently generating about 0.06 per unit of risk. If you would invest 1,564 in Tidal Trust II on August 24, 2024 and sell it today you would earn a total of 184.00 from holding Tidal Trust II or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tidal Trust II vs. Dimensional ETF Trust
Performance |
| Timeline |
| Tidal Trust II |
| Dimensional ETF Trust |
Tidal Trust and Dimensional ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and Dimensional ETF
The main advantage of trading using opposite Tidal Trust and Dimensional ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, Dimensional 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 Dimensional ETF will offset losses from the drop in Dimensional ETF'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 |
| Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. Dimensional International Value | Dimensional ETF vs. Dimensional Targeted Value |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Transaction History View history of all your transactions and understand their impact on performance |