Correlation Between Tidal ETF and SmartETFs Asia
Can any of the company-specific risk be diversified away by investing in both Tidal ETF and SmartETFs Asia 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 ETF and SmartETFs Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tidal ETF Trust and SmartETFs Asia Pacific, you can compare the effects of market volatilities on Tidal ETF and SmartETFs Asia 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 ETF with a short position of SmartETFs Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal ETF and SmartETFs Asia.
Diversification Opportunities for Tidal ETF and SmartETFs Asia
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tidal and SmartETFs is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Tidal ETF Trust and SmartETFs Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartETFs Asia Pacific and Tidal ETF 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 ETF Trust are associated (or correlated) with SmartETFs Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartETFs Asia Pacific has no effect on the direction of Tidal ETF i.e., Tidal ETF and SmartETFs Asia go up and down completely randomly.
Pair Corralation between Tidal ETF and SmartETFs Asia
Given the investment horizon of 90 days Tidal ETF is expected to generate 3.03 times less return on investment than SmartETFs Asia. But when comparing it to its historical volatility, Tidal ETF Trust is 1.42 times less risky than SmartETFs Asia. It trades about 0.07 of its potential returns per unit of risk. SmartETFs Asia Pacific is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,549 in SmartETFs Asia Pacific on September 13, 2024 and sell it today you would earn a total of 42.00 from holding SmartETFs Asia Pacific or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tidal ETF Trust vs. SmartETFs Asia Pacific
Performance |
| Timeline |
| Tidal ETF Trust |
| SmartETFs Asia Pacific |
Tidal ETF and SmartETFs Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal ETF and SmartETFs Asia
The main advantage of trading using opposite Tidal ETF and SmartETFs Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal ETF position performs unexpectedly, SmartETFs Asia 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 SmartETFs Asia will offset losses from the drop in SmartETFs Asia's long position.| Tidal ETF vs. JP Morgan Exchange Traded | Tidal ETF vs. FlexShares STOXX ESG | Tidal ETF vs. IQ Candriam ESG |
| SmartETFs Asia vs. iShares Latin America | SmartETFs Asia vs. iShares Europe ETF | SmartETFs Asia vs. iShares MSCI Malaysia | SmartETFs Asia vs. iShares MSCI Sweden |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |