Correlation Between LHA Market and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both LHA Market 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 LHA Market and Tidal Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LHA Market State and Tidal Trust II, you can compare the effects of market volatilities on LHA Market 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 LHA Market with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of LHA Market and Tidal Trust.
Diversification Opportunities for LHA Market and Tidal Trust
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LHA and Tidal is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding LHA Market State 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 LHA Market 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 LHA Market State 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 LHA Market i.e., LHA Market and Tidal Trust go up and down completely randomly.
Pair Corralation between LHA Market and Tidal Trust
Given the investment horizon of 90 days LHA Market State is expected to under-perform the Tidal Trust. In addition to that, LHA Market is 1.54 times more volatile than Tidal Trust II. It trades about -0.1 of its total potential returns per unit of risk. Tidal Trust II is currently generating about 0.1 per unit of volatility. If you would invest 2,212 in Tidal Trust II on August 28, 2024 and sell it today you would earn a total of 100.00 from holding Tidal Trust II or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LHA Market State vs. Tidal Trust II
Performance |
| Timeline |
| LHA Market State |
| Tidal Trust II |
LHA Market and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LHA Market and Tidal Trust
The main advantage of trading using opposite LHA Market and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LHA Market 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.| LHA Market vs. WisdomTree 9060 Balanced | LHA Market vs. RPAR Risk Parity | LHA Market vs. Cambria Tail Risk | LHA Market vs. Aptus Defined Risk |
| Tidal Trust vs. EA Series Trust | Tidal Trust vs. ProShares VIX Mid Term | Tidal Trust vs. ProShares VIX Short Term | Tidal Trust vs. LHA Market State |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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