Correlation Between EA Series and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both EA Series and Tidal Trust 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 EA Series and Tidal Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EA Series Trust and Tidal Trust III, you can compare the effects of market volatilities on EA Series and Tidal Trust 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 EA Series with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of EA Series and Tidal Trust.
Diversification Opportunities for EA Series and Tidal Trust
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DRAI and Tidal is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Tidal Trust III in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust III and EA Series 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 EA Series Trust are associated (or correlated) with Tidal Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal Trust III has no effect on the direction of EA Series i.e., EA Series and Tidal Trust go up and down completely randomly.
Pair Corralation between EA Series and Tidal Trust
Given the investment horizon of 90 days EA Series Trust is expected to under-perform the Tidal Trust. But the etf apears to be less risky and, when comparing its historical volatility, EA Series Trust is 260.73 times less risky than Tidal Trust. The etf trades about -0.02 of its potential returns per unit of risk. The Tidal Trust III is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Tidal Trust III on September 4, 2024 and sell it today you would earn a total of 2,040 from holding Tidal Trust III or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 10.68% |
| Values | Daily Returns |
EA Series Trust vs. Tidal Trust III
Performance |
| Timeline |
| EA Series Trust |
| Tidal Trust III |
EA Series and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EA Series and Tidal Trust
The main advantage of trading using opposite EA Series and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EA Series position performs unexpectedly, Tidal Trust 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 Tidal Trust will offset losses from the drop in Tidal Trust's long position.| EA Series vs. Vanguard Total Stock | EA Series vs. SPDR SP 500 | EA Series vs. Vanguard Total Bond | EA Series vs. Vanguard Value Index |
| Tidal Trust vs. First Trust Multi Asset | Tidal Trust vs. Collaborative Investment Series | Tidal Trust vs. EA Series Trust | Tidal Trust vs. Ocean Park International |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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