Correlation Between Tidal Trust and US Treasury
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and US Treasury 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 US Treasury 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 US Treasury 12, you can compare the effects of market volatilities on Tidal Trust and US Treasury 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 US Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and US Treasury.
Diversification Opportunities for Tidal Trust and US Treasury
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tidal and OBIL is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and US Treasury 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Treasury 12 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 US Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Treasury 12 has no effect on the direction of Tidal Trust i.e., Tidal Trust and US Treasury go up and down completely randomly.
Pair Corralation between Tidal Trust and US Treasury
Given the investment horizon of 90 days Tidal Trust II is expected to generate 7.84 times more return on investment than US Treasury. However, Tidal Trust is 7.84 times more volatile than US Treasury 12. It trades about 0.02 of its potential returns per unit of risk. US Treasury 12 is currently generating about 0.09 per unit of risk. If you would invest 1,939 in Tidal Trust II on August 25, 2024 and sell it today you would earn a total of 4.00 from holding Tidal Trust II or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tidal Trust II vs. US Treasury 12
Performance |
| Timeline |
| Tidal Trust II |
| US Treasury 12 |
Tidal Trust and US Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and US Treasury
The main advantage of trading using opposite Tidal Trust and US Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, US Treasury 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 US Treasury will offset losses from the drop in US Treasury's long position.| Tidal Trust vs. First Trust TCW | Tidal Trust vs. FolioBeyond Rising Rates | Tidal Trust vs. TrimTabs Donoghue Forlines | Tidal Trust vs. SSGA Active Trust |
| US Treasury vs. SPDR Barclays Short | US Treasury vs. iShares Agency Bond | US Treasury vs. Rbb Fund | US Treasury vs. Bondbloxx 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |