Correlation Between Tidal Trust and IShares International
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and IShares International 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 IShares International 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 iShares International Select, you can compare the effects of market volatilities on Tidal Trust and IShares International 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 IShares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and IShares International.
Diversification Opportunities for Tidal Trust and IShares International
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tidal and IShares is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and iShares International Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares International 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 IShares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares International has no effect on the direction of Tidal Trust i.e., Tidal Trust and IShares International go up and down completely randomly.
Pair Corralation between Tidal Trust and IShares International
Given the investment horizon of 90 days Tidal Trust II is expected to generate 1.43 times more return on investment than IShares International. However, Tidal Trust is 1.43 times more volatile than iShares International Select. It trades about 0.06 of its potential returns per unit of risk. iShares International Select is currently generating about 0.04 per unit of risk. If you would invest 1,428 in Tidal Trust II on August 30, 2024 and sell it today you would earn a total of 347.00 from holding Tidal Trust II or generate 24.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 64.31% |
| Values | Daily Returns |
Tidal Trust II vs. iShares International Select
Performance |
| Timeline |
| Tidal Trust II |
| iShares International |
Tidal Trust and IShares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and IShares International
The main advantage of trading using opposite Tidal Trust and IShares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, IShares International 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 IShares International will offset losses from the drop in IShares International's long position.| Tidal Trust vs. Freedom Day Dividend | Tidal Trust vs. Franklin Templeton ETF | Tidal Trust vs. iShares MSCI China | Tidal Trust vs. Tidal Trust II |
| IShares International vs. iShares Core High | IShares International vs. SPDR SP International | IShares International vs. iShares Select Dividend | IShares International vs. iShares Emerging Markets |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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