Correlation Between Tidal Trust and Matthews China
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and Matthews China 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 Matthews China 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 Matthews China Discovery, you can compare the effects of market volatilities on Tidal Trust and Matthews China 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 Matthews China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and Matthews China.
Diversification Opportunities for Tidal Trust and Matthews China
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tidal and Matthews is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and Matthews China Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews China Discovery 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 Matthews China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews China Discovery has no effect on the direction of Tidal Trust i.e., Tidal Trust and Matthews China go up and down completely randomly.
Pair Corralation between Tidal Trust and Matthews China
Given the investment horizon of 90 days Tidal Trust II is expected to generate 0.52 times more return on investment than Matthews China. However, Tidal Trust II is 1.94 times less risky than Matthews China. It trades about 0.07 of its potential returns per unit of risk. Matthews China Discovery is currently generating about 0.02 per unit of risk. If you would invest 1,945 in Tidal Trust II on August 31, 2024 and sell it today you would earn a total of 282.00 from holding Tidal Trust II or generate 14.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.13% |
| Values | Daily Returns |
Tidal Trust II vs. Matthews China Discovery
Performance |
| Timeline |
| Tidal Trust II |
| Matthews China Discovery |
Tidal Trust and Matthews China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and Matthews China
The main advantage of trading using opposite Tidal Trust and Matthews China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, Matthews China 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 Matthews China will offset losses from the drop in Matthews China'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 |
| Matthews China vs. Xtrackers Harvest CSI | Matthews China vs. Aquagold International | Matthews China vs. Thrivent High Yield | Matthews China 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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