Correlation Between Tidal Trust and IShares Russell
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and IShares 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 IShares 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 iShares Russell 2000, you can compare the effects of market volatilities on Tidal Trust and IShares 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 IShares Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and IShares Russell.
Diversification Opportunities for Tidal Trust and IShares Russell
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tidal and IShares is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and iShares Russell 2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Russell 2000 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 Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Russell 2000 has no effect on the direction of Tidal Trust i.e., Tidal Trust and IShares Russell go up and down completely randomly.
Pair Corralation between Tidal Trust and IShares Russell
Given the investment horizon of 90 days Tidal Trust II is expected to generate 0.91 times more return on investment than IShares Russell. However, Tidal Trust II is 1.09 times less risky than IShares Russell. It trades about 0.06 of its potential returns per unit of risk. iShares Russell 2000 is currently generating about 0.04 per unit of risk. If you would invest 1,284 in Tidal Trust II on November 19, 2024 and sell it today you would earn a total of 323.00 from holding Tidal Trust II or generate 25.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 75.0% |
| Values | Daily Returns |
Tidal Trust II vs. iShares Russell 2000
Performance |
| Timeline |
| Tidal Trust II |
| iShares Russell 2000 |
Tidal Trust and IShares Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and IShares Russell
The main advantage of trading using opposite Tidal Trust and IShares Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, IShares 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 IShares Russell will offset losses from the drop in IShares 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 |
| IShares Russell vs. SPDR Dow Jones | IShares Russell vs. iShares MSCI Emerging | IShares Russell vs. Financial Select Sector | IShares Russell vs. SPDR SP 500 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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