Correlation Between IQ Merger and Tidal ETF
Can any of the company-specific risk be diversified away by investing in both IQ Merger and Tidal ETF 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 IQ Merger and Tidal ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQ Merger Arbitrage and Tidal ETF Trust, you can compare the effects of market volatilities on IQ Merger and Tidal ETF 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 IQ Merger with a short position of Tidal ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ Merger and Tidal ETF.
Diversification Opportunities for IQ Merger and Tidal ETF
Modest diversification
The 3 months correlation between MNA and Tidal is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding IQ Merger Arbitrage and Tidal ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal ETF Trust and IQ Merger 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 IQ Merger Arbitrage are associated (or correlated) with Tidal ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal ETF Trust has no effect on the direction of IQ Merger i.e., IQ Merger and Tidal ETF go up and down completely randomly.
Pair Corralation between IQ Merger and Tidal ETF
Considering the 90-day investment horizon IQ Merger Arbitrage is expected to under-perform the Tidal ETF. But the etf apears to be less risky and, when comparing its historical volatility, IQ Merger Arbitrage is 3.33 times less risky than Tidal ETF. The etf trades about -0.05 of its potential returns per unit of risk. The Tidal ETF Trust is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,234 in Tidal ETF Trust on August 25, 2024 and sell it today you would earn a total of 45.00 from holding Tidal ETF Trust or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQ Merger Arbitrage vs. Tidal ETF Trust
Performance |
| Timeline |
| IQ Merger Arbitrage |
| Tidal ETF Trust |
IQ Merger and Tidal ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQ Merger and Tidal ETF
The main advantage of trading using opposite IQ Merger and Tidal ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ Merger position performs unexpectedly, Tidal ETF 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 ETF will offset losses from the drop in Tidal ETF's long position.| IQ Merger vs. Albany International | IQ Merger vs. Acadia Realty Trust | IQ Merger vs. AptarGroup | IQ Merger vs. Applied Industrial Technologies |
| Tidal ETF vs. IQ Merger Arbitrage | Tidal ETF vs. First Trust LongShort | Tidal ETF vs. Aquagold International | Tidal ETF vs. Morningstar Unconstrained Allocation |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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