Correlation Between T REX and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both T REX 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 T REX and Tidal Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T REX 2X Long and Tidal Trust II, you can compare the effects of market volatilities on T REX 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 T REX with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of T REX and Tidal Trust.
Diversification Opportunities for T REX and Tidal Trust
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between MSTU and Tidal is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding T REX 2X Long 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 T REX 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 T REX 2X Long 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 T REX i.e., T REX and Tidal Trust go up and down completely randomly.
Pair Corralation between T REX and Tidal Trust
Given the investment horizon of 90 days T REX is expected to generate 2.37 times less return on investment than Tidal Trust. But when comparing it to its historical volatility, T REX 2X Long is 7.27 times less risky than Tidal Trust. It trades about 0.31 of its potential returns per unit of risk. Tidal Trust II is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Tidal Trust II on September 3, 2024 and sell it today you would earn a total of 1,393 from holding Tidal Trust II or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 56.99% |
| Values | Daily Returns |
T REX 2X Long vs. Tidal Trust II
Performance |
| Timeline |
| T REX 2X |
| Tidal Trust II |
T REX and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T REX and Tidal Trust
The main advantage of trading using opposite T REX and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T REX 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.| T REX vs. Tidal Trust II | T REX vs. Tidal Trust II | T REX vs. Direxion Daily META | T REX vs. Direxion Daily META |
| Tidal Trust vs. Vanguard Total Stock | Tidal Trust vs. SPDR SP 500 | Tidal Trust vs. Vanguard Total Bond | Tidal Trust vs. Vanguard Value Index |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |