Correlation Between IShares Trust and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both IShares Trust 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 IShares Trust and Tidal Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and Tidal Trust II, you can compare the effects of market volatilities on IShares Trust 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 IShares Trust with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and Tidal Trust.
Diversification Opportunities for IShares Trust and Tidal Trust
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Tidal is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding iShares 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 IShares 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 iShares 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 IShares Trust i.e., IShares Trust and Tidal Trust go up and down completely randomly.
Pair Corralation between IShares Trust and Tidal Trust
Given the investment horizon of 90 days IShares Trust is expected to generate 3.54 times less return on investment than Tidal Trust. But when comparing it to its historical volatility, iShares Trust is 17.05 times less risky than Tidal Trust. It trades about 0.21 of its potential returns per unit of risk. Tidal Trust II is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,112 in Tidal Trust II on September 1, 2024 and sell it today you would earn a total of 288.00 from holding Tidal Trust II or generate 25.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
iShares Trust vs. Tidal Trust II
Performance |
| Timeline |
| iShares Trust |
| Tidal Trust II |
IShares Trust and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and Tidal Trust
The main advantage of trading using opposite IShares Trust and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust 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.| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. Simplify Volatility Premium | IShares Trust vs. Tidal Trust II |
| Tidal Trust vs. Tidal Trust II | Tidal Trust vs. Simplify Volatility Premium | Tidal Trust vs. Tidal Trust II | Tidal Trust vs. Tidal Trust II |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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