Correlation Between Tidal Trust and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and Franklin FTSE 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 Franklin FTSE 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 Franklin FTSE China, you can compare the effects of market volatilities on Tidal Trust and Franklin FTSE 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 Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and Franklin FTSE.
Diversification Opportunities for Tidal Trust and Franklin FTSE
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tidal and Franklin is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and Franklin FTSE China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE China 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 Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE China has no effect on the direction of Tidal Trust i.e., Tidal Trust and Franklin FTSE go up and down completely randomly.
Pair Corralation between Tidal Trust and Franklin FTSE
Given the investment horizon of 90 days Tidal Trust II is expected to generate 0.41 times more return on investment than Franklin FTSE. However, Tidal Trust II is 2.44 times less risky than Franklin FTSE. It trades about 0.18 of its potential returns per unit of risk. Franklin FTSE China is currently generating about -0.07 per unit of risk. If you would invest 2,157 in Tidal Trust II on September 1, 2024 and sell it today you would earn a total of 70.00 from holding Tidal Trust II or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tidal Trust II vs. Franklin FTSE China
Performance |
| Timeline |
| Tidal Trust II |
| Franklin FTSE China |
Tidal Trust and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and Franklin FTSE
The main advantage of trading using opposite Tidal Trust and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, Franklin FTSE 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 Franklin FTSE will offset losses from the drop in Franklin FTSE's long position.| Tidal Trust vs. First Trust Exchange Traded | Tidal Trust vs. Ultimus Managers Trust | Tidal Trust vs. Horizon Kinetics Medical | Tidal Trust vs. Harbor Health Care |
| Franklin FTSE vs. Xtrackers Harvest CSI | Franklin FTSE vs. Aquagold International | Franklin FTSE vs. Thrivent High Yield | Franklin FTSE vs. Morningstar Unconstrained Allocation |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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