Correlation Between Tidal Trust and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and SPDR SP 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 SPDR SP 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 SPDR SP Global, you can compare the effects of market volatilities on Tidal Trust and SPDR SP 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 SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and SPDR SP.
Diversification Opportunities for Tidal Trust and SPDR SP
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tidal and SPDR is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and SPDR SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Global 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 SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Global has no effect on the direction of Tidal Trust i.e., Tidal Trust and SPDR SP go up and down completely randomly.
Pair Corralation between Tidal Trust and SPDR SP
Given the investment horizon of 90 days Tidal Trust II is expected to generate 2.0 times more return on investment than SPDR SP. However, Tidal Trust is 2.0 times more volatile than SPDR SP Global. It trades about 0.3 of its potential returns per unit of risk. SPDR SP Global is currently generating about 0.06 per unit of risk. If you would invest 1,580 in Tidal Trust II on August 27, 2024 and sell it today you would earn a total of 161.00 from holding Tidal Trust II or generate 10.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tidal Trust II vs. SPDR SP Global
Performance |
| Timeline |
| Tidal Trust II |
| SPDR SP Global |
Tidal Trust and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and SPDR SP
The main advantage of trading using opposite Tidal Trust and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP'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 |
| SPDR SP vs. iShares Dividend and | SPDR SP vs. Martin Currie Sustainable | SPDR SP vs. VictoryShares THB Mid | SPDR SP vs. Mast Global Battery |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |