Correlation Between Tidal Trust and GraniteShares
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and GraniteShares 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 GraniteShares 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 GraniteShares 2x Long, you can compare the effects of market volatilities on Tidal Trust and GraniteShares 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 GraniteShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and GraniteShares.
Diversification Opportunities for Tidal Trust and GraniteShares
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tidal and GraniteShares is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and GraniteShares 2x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 2x Long 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 GraniteShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 2x Long has no effect on the direction of Tidal Trust i.e., Tidal Trust and GraniteShares go up and down completely randomly.
Pair Corralation between Tidal Trust and GraniteShares
Given the investment horizon of 90 days Tidal Trust II is expected to generate 0.71 times more return on investment than GraniteShares. However, Tidal Trust II is 1.4 times less risky than GraniteShares. It trades about 0.35 of its potential returns per unit of risk. GraniteShares 2x Long is currently generating about 0.13 per unit of risk. If you would invest 1,583 in Tidal Trust II on September 2, 2024 and sell it today you would earn a total of 190.00 from holding Tidal Trust II or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tidal Trust II vs. GraniteShares 2x Long
Performance |
| Timeline |
| Tidal Trust II |
| GraniteShares 2x Long |
Tidal Trust and GraniteShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and GraniteShares
The main advantage of trading using opposite Tidal Trust and GraniteShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, GraniteShares 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 GraniteShares will offset losses from the drop in GraniteShares' 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 |
| GraniteShares vs. Tidal Trust II | GraniteShares vs. Tidal Trust II | GraniteShares vs. Direxion Daily META | GraniteShares vs. Direxion Daily META |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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