Correlation Between Tidal Trust and IShares Thematic
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and IShares Thematic 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 IShares Thematic 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 iShares Thematic Rotation, you can compare the effects of market volatilities on Tidal Trust and IShares Thematic 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 IShares Thematic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and IShares Thematic.
Diversification Opportunities for Tidal Trust and IShares Thematic
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tidal and IShares is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and iShares Thematic Rotation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Thematic Rotation 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 IShares Thematic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Thematic Rotation has no effect on the direction of Tidal Trust i.e., Tidal Trust and IShares Thematic go up and down completely randomly.
Pair Corralation between Tidal Trust and IShares Thematic
Given the investment horizon of 90 days Tidal Trust is expected to generate 2.78 times less return on investment than IShares Thematic. In addition to that, Tidal Trust is 1.09 times more volatile than iShares Thematic Rotation. It trades about 0.05 of its total potential returns per unit of risk. iShares Thematic Rotation is currently generating about 0.15 per unit of volatility. If you would invest 2,552 in iShares Thematic Rotation on September 12, 2024 and sell it today you would earn a total of 956.01 from holding iShares Thematic Rotation or generate 37.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.92% |
| Values | Daily Returns |
Tidal Trust II vs. iShares Thematic Rotation
Performance |
| Timeline |
| Tidal Trust II |
| iShares Thematic Rotation |
Tidal Trust and IShares Thematic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and IShares Thematic
The main advantage of trading using opposite Tidal Trust and IShares Thematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, IShares Thematic 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 IShares Thematic will offset losses from the drop in IShares Thematic's long position.| Tidal Trust vs. Vanguard Real Estate | Tidal Trust vs. Howard Hughes | Tidal Trust vs. The Real Estate | Tidal Trust vs. Site Centers Corp |
| IShares Thematic vs. Vanguard SP 500 | IShares Thematic vs. Vanguard Real Estate | IShares Thematic vs. Vanguard Total Bond | IShares Thematic vs. Vanguard High Dividend |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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