Correlation Between IShares Russell and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both IShares Russell 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 Russell 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 Russell 1000 and Tidal Trust II, you can compare the effects of market volatilities on IShares Russell 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 Russell with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and Tidal Trust.
Diversification Opportunities for IShares Russell and Tidal Trust
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and Tidal is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell 1000 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 Russell 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 Russell 1000 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 Russell i.e., IShares Russell and Tidal Trust go up and down completely randomly.
Pair Corralation between IShares Russell and Tidal Trust
Considering the 90-day investment horizon iShares Russell 1000 is expected to generate 1.13 times more return on investment than Tidal Trust. However, IShares Russell is 1.13 times more volatile than Tidal Trust II. It trades about 0.11 of its potential returns per unit of risk. Tidal Trust II is currently generating about 0.11 per unit of risk. If you would invest 21,044 in iShares Russell 1000 on August 30, 2024 and sell it today you would earn a total of 12,017 from holding iShares Russell 1000 or generate 57.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 37.37% |
| Values | Daily Returns |
iShares Russell 1000 vs. Tidal Trust II
Performance |
| Timeline |
| iShares Russell 1000 |
| Tidal Trust II |
IShares Russell and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and Tidal Trust
The main advantage of trading using opposite IShares Russell and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell 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 Russell vs. iShares Russell 3000 | IShares Russell vs. iShares Russell Mid Cap | IShares Russell vs. iShares Russell 1000 | IShares Russell vs. iShares Russell 2000 |
| Tidal Trust vs. Freedom Day Dividend | Tidal Trust vs. Franklin Templeton ETF | Tidal Trust vs. iShares MSCI China | Tidal Trust vs. Tidal Trust II |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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