Correlation Between KraneShares Trust and Tidal Trust

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both KraneShares Trust 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 KraneShares Trust and Tidal Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KraneShares Trust and Tidal Trust II, you can compare the effects of market volatilities on KraneShares Trust 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 KraneShares Trust with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of KraneShares Trust and Tidal Trust.

Diversification Opportunities for KraneShares Trust and Tidal Trust

0.31
  Correlation Coefficient

Weak diversification

The 3 months correlation between KraneShares and Tidal is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding KraneShares Trust 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 KraneShares 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 KraneShares Trust 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 KraneShares Trust i.e., KraneShares Trust and Tidal Trust go up and down completely randomly.

Pair Corralation between KraneShares Trust and Tidal Trust

Given the investment horizon of 90 days KraneShares Trust is expected to generate 41.45 times less return on investment than Tidal Trust. But when comparing it to its historical volatility, KraneShares Trust is 35.01 times less risky than Tidal Trust. It trades about 0.04 of its potential returns per unit of risk. Tidal Trust II is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Tidal Trust II on November 4, 2024 and sell it today you would earn a total of  1,676  from holding Tidal Trust II or generate 9.223372036854776E16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy91.31%
ValuesDaily Returns

KraneShares Trust   vs.  Tidal Trust II

 Performance 
       Timeline  
KraneShares Trust 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in KraneShares Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward indicators, KraneShares Trust is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
Tidal Trust II 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Tidal Trust II are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, Tidal Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

KraneShares Trust and Tidal Trust Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KraneShares Trust and Tidal Trust

The main advantage of trading using opposite KraneShares Trust and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KraneShares Trust 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.
The idea behind KraneShares Trust and Tidal Trust II pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.

Other Complementary Tools

Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Volatility Analysis
Get historical volatility and risk analysis based on latest market data