Correlation Between IndexIQ Active and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both IndexIQ 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 IndexIQ 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 IndexIQ Active ETF and Tidal Trust III, you can compare the effects of market volatilities on IndexIQ 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 IndexIQ Active with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IndexIQ Active and Tidal Trust.
Diversification Opportunities for IndexIQ Active and Tidal Trust
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IndexIQ and Tidal is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding IndexIQ Active ETF 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 IndexIQ 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 IndexIQ Active ETF 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 IndexIQ Active i.e., IndexIQ Active and Tidal Trust go up and down completely randomly.
Pair Corralation between IndexIQ Active and Tidal Trust
Given the investment horizon of 90 days IndexIQ Active ETF is expected to generate 0.71 times more return on investment than Tidal Trust. However, IndexIQ Active ETF is 1.42 times less risky than Tidal Trust. It trades about 0.16 of its potential returns per unit of risk. Tidal Trust III is currently generating about 0.11 per unit of risk. If you would invest 2,142 in IndexIQ Active ETF on November 27, 2024 and sell it today you would earn a total of 14.00 from holding IndexIQ Active ETF or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IndexIQ Active ETF vs. Tidal Trust III
Performance |
| Timeline |
| IndexIQ Active ETF |
| Tidal Trust III |
IndexIQ Active and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IndexIQ Active and Tidal Trust
The main advantage of trading using opposite IndexIQ Active and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IndexIQ 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.| IndexIQ Active vs. Dimensional ETF Trust | IndexIQ Active vs. JP Morgan Exchange Traded | IndexIQ Active vs. Janus Detroit Street | IndexIQ Active vs. BlackRock Intermediate Muni |
| Tidal Trust vs. VanEck Vectors Moodys | Tidal Trust vs. Valued Advisers Trust | Tidal Trust vs. Xtrackers California Municipal | Tidal Trust vs. Principal Exchange Traded Funds |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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