Correlation Between Tidal ETF and EA Series
Can any of the company-specific risk be diversified away by investing in both Tidal ETF and EA Series 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 ETF and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tidal ETF Trust and EA Series Trust, you can compare the effects of market volatilities on Tidal ETF and EA Series 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 ETF with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal ETF and EA Series.
Diversification Opportunities for Tidal ETF and EA Series
Poor diversification
The 3 months correlation between Tidal and ECML is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Tidal ETF Trust and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust and Tidal ETF 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 ETF Trust are associated (or correlated) with EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of Tidal ETF i.e., Tidal ETF and EA Series go up and down completely randomly.
Pair Corralation between Tidal ETF and EA Series
Given the investment horizon of 90 days Tidal ETF is expected to generate 1.09 times less return on investment than EA Series. But when comparing it to its historical volatility, Tidal ETF Trust is 1.59 times less risky than EA Series. It trades about 0.09 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,293 in EA Series Trust on September 1, 2024 and sell it today you would earn a total of 294.00 from holding EA Series Trust or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Tidal ETF Trust vs. EA Series Trust
Performance |
| Timeline |
| Tidal ETF Trust |
| EA Series Trust |
Tidal ETF and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal ETF and EA Series
The main advantage of trading using opposite Tidal ETF and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal ETF position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.| Tidal ETF vs. Franklin Templeton ETF | Tidal ETF vs. Altrius Global Dividend | Tidal ETF vs. Invesco Exchange Traded | Tidal ETF vs. Franklin International Core |
| EA Series vs. Vanguard Small Cap Value | EA Series vs. Dimensional Targeted Value | EA Series vs. SPDR SP 600 | EA Series vs. Avantis Small Cap |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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