Correlation Between Tidal ETF and Global X
Can any of the company-specific risk be diversified away by investing in both Tidal ETF and Global X 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 Global X 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 Global X Funds, you can compare the effects of market volatilities on Tidal ETF and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal ETF and Global X.
Diversification Opportunities for Tidal ETF and Global X
Average diversification
The 3 months correlation between Tidal and Global is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Tidal ETF Trust and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of Tidal ETF i.e., Tidal ETF and Global X go up and down completely randomly.
Pair Corralation between Tidal ETF and Global X
Given the investment horizon of 90 days Tidal ETF is expected to generate 2.56 times less return on investment than Global X. In addition to that, Tidal ETF is 1.08 times more volatile than Global X Funds. It trades about 0.03 of its total potential returns per unit of risk. Global X Funds is currently generating about 0.08 per unit of volatility. If you would invest 2,494 in Global X Funds on September 3, 2024 and sell it today you would earn a total of 598.00 from holding Global X Funds or generate 23.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 65.66% |
| Values | Daily Returns |
Tidal ETF Trust vs. Global X Funds
Performance |
| Timeline |
| Tidal ETF Trust |
| Global X Funds |
Tidal ETF and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal ETF and Global X
The main advantage of trading using opposite Tidal ETF and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal ETF position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Tidal ETF vs. Freedom Day Dividend | Tidal ETF vs. iShares MSCI China | Tidal ETF vs. SmartETFs Dividend Builder | Tidal ETF vs. Listed Funds Trust |
| Global X vs. Freedom Day Dividend | Global X vs. iShares MSCI China | Global X vs. SmartETFs Dividend Builder | Global X vs. Tidal ETF Trust |
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.
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