Correlation Between SSGA Active and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both SSGA Active 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 SSGA Active and Tidal Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSGA Active Trust and Tidal Trust III, you can compare the effects of market volatilities on SSGA Active 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 SSGA Active with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and Tidal Trust.
Diversification Opportunities for SSGA Active and Tidal Trust
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SSGA and Tidal is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and Tidal Trust III in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust III and SSGA Active 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 SSGA Active 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 III has no effect on the direction of SSGA Active i.e., SSGA Active and Tidal Trust go up and down completely randomly.
Pair Corralation between SSGA Active and Tidal Trust
Given the investment horizon of 90 days SSGA Active is expected to generate 1.19 times less return on investment than Tidal Trust. But when comparing it to its historical volatility, SSGA Active Trust is 2.0 times less risky than Tidal Trust. It trades about 0.19 of its potential returns per unit of risk. Tidal Trust III is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,490 in Tidal Trust III on August 26, 2024 and sell it today you would earn a total of 79.00 from holding Tidal Trust III or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 27.41% |
| Values | Daily Returns |
SSGA Active Trust vs. Tidal Trust III
Performance |
| Timeline |
| SSGA Active Trust |
| Tidal Trust III |
SSGA Active and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and Tidal Trust
The main advantage of trading using opposite SSGA Active and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active 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.| SSGA Active vs. BlackRock Intermediate Muni | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SPDR MarketAxess Investment | SSGA Active vs. SSGA Active Trust |
| Tidal Trust vs. SSGA Active Trust | Tidal Trust vs. SPDR Nuveen Municipal | Tidal Trust vs. Xtrackers California Municipal | Tidal Trust vs. iShares Short Maturity |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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