Correlation Between Tidal Trust and KraneShares MSCI
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and KraneShares MSCI 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 KraneShares MSCI 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 KraneShares MSCI China, you can compare the effects of market volatilities on Tidal Trust and KraneShares MSCI 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 KraneShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and KraneShares MSCI.
Diversification Opportunities for Tidal Trust and KraneShares MSCI
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tidal and KraneShares is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and KraneShares MSCI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares MSCI 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 KraneShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares MSCI China has no effect on the direction of Tidal Trust i.e., Tidal Trust and KraneShares MSCI go up and down completely randomly.
Pair Corralation between Tidal Trust and KraneShares MSCI
Given the investment horizon of 90 days Tidal Trust II is expected to generate 0.36 times more return on investment than KraneShares MSCI. However, Tidal Trust II is 2.81 times less risky than KraneShares MSCI. It trades about 0.08 of its potential returns per unit of risk. KraneShares MSCI China is currently generating about -0.09 per unit of risk. If you would invest 2,193 in Tidal Trust II on August 31, 2024 and sell it today you would earn a total of 34.00 from holding Tidal Trust II or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tidal Trust II vs. KraneShares MSCI China
Performance |
| Timeline |
| Tidal Trust II |
| KraneShares MSCI China |
Tidal Trust and KraneShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and KraneShares MSCI
The main advantage of trading using opposite Tidal Trust and KraneShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, KraneShares MSCI 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 KraneShares MSCI will offset losses from the drop in KraneShares MSCI's long position.| Tidal Trust vs. Nuveen Short Term REIT | Tidal Trust vs. Aquagold International | Tidal Trust vs. Thrivent High Yield | Tidal Trust vs. Morningstar Unconstrained Allocation |
| KraneShares MSCI vs. Xtrackers Harvest CSI | KraneShares MSCI vs. Aquagold International | KraneShares MSCI vs. Thrivent High Yield | KraneShares MSCI 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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