Correlation Between IShares SP and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both IShares SP 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 SP 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 SP 500 and Tidal Trust II, you can compare the effects of market volatilities on IShares SP 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 SP with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and Tidal Trust.
Diversification Opportunities for IShares SP and Tidal Trust
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Tidal is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP 500 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 SP 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 SP 500 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 SP i.e., IShares SP and Tidal Trust go up and down completely randomly.
Pair Corralation between IShares SP and Tidal Trust
Considering the 90-day investment horizon iShares SP 500 is expected to generate 0.73 times more return on investment than Tidal Trust. However, iShares SP 500 is 1.37 times less risky than Tidal Trust. It trades about 0.11 of its potential returns per unit of risk. Tidal Trust II is currently generating about 0.06 per unit of risk. If you would invest 7,062 in iShares SP 500 on August 26, 2024 and sell it today you would earn a total of 2,900 from holding iShares SP 500 or generate 41.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SP 500 vs. Tidal Trust II
Performance |
| Timeline |
| iShares SP 500 |
| Tidal Trust II |
IShares SP and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and Tidal Trust
The main advantage of trading using opposite IShares SP and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP 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 SP vs. FT Vest Equity | IShares SP vs. Northern Lights | IShares SP vs. Dimensional International High | IShares SP vs. First Trust Exchange Traded |
| Tidal Trust vs. Invesco Dynamic Large | Tidal Trust vs. Perella Weinberg Partners | Tidal Trust vs. HUMANA INC | Tidal Trust vs. Aquagold International |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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