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 II, 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
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DRLL and Tidal is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding EA Series Trust and Tidal Trust II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust II 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 II 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 generate 0.24 times more return on investment than Tidal Trust. However, EA Series Trust is 4.08 times less risky than Tidal Trust. It trades about -0.14 of its potential returns per unit of risk. Tidal Trust II is currently generating about -0.05 per unit of risk. If you would invest 2,959 in EA Series Trust on September 13, 2024 and sell it today you would lose (100.00) from holding EA Series Trust or give up 3.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EA Series Trust vs. Tidal Trust II
Performance |
| Timeline |
| EA Series Trust |
| Tidal Trust II |
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. EA Series Trust | EA Series vs. EA Series Trust | EA Series vs. Rumble Inc | EA Series vs. EA Series Trust |
| Tidal Trust vs. ProShares Ultra SP500 | Tidal Trust vs. Direxion Daily SP | Tidal Trust vs. Direxion Daily SP | Tidal Trust vs. MicroSectors FANG Index |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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