Correlation Between LHA Market and Tidal ETF
Can any of the company-specific risk be diversified away by investing in both LHA Market 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 LHA Market and Tidal ETF 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 ETF Trust, you can compare the effects of market volatilities on LHA Market 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 LHA Market with a short position of Tidal ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of LHA Market and Tidal ETF.
Diversification Opportunities for LHA Market and Tidal ETF
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LHA and Tidal is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding LHA Market State 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 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 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 LHA Market i.e., LHA Market and Tidal ETF go up and down completely randomly.
Pair Corralation between LHA Market and Tidal ETF
Given the investment horizon of 90 days LHA Market State is expected to under-perform the Tidal ETF. But the etf apears to be less risky and, when comparing its historical volatility, LHA Market State is 1.46 times less risky than Tidal ETF. The etf trades about -0.03 of its potential returns per unit of risk. The Tidal ETF Trust is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,754 in Tidal ETF Trust on September 4, 2024 and sell it today you would lose (120.00) from holding Tidal ETF Trust or give up 4.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LHA Market State vs. Tidal ETF Trust
Performance |
| Timeline |
| LHA Market State |
| Tidal ETF Trust |
LHA Market and Tidal ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LHA Market and Tidal ETF
The main advantage of trading using opposite LHA Market and Tidal ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LHA Market 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.| LHA Market vs. Core Alternative ETF | LHA Market vs. Aptus Drawdown Managed | LHA Market vs. Swan Hedged Equity | LHA Market vs. Cambria Value and |
| Tidal ETF vs. KFA Mount Lucas | Tidal ETF vs. AGFiQ Market Neutral | Tidal ETF vs. iMGP DBi Managed | Tidal ETF vs. First Trust LongShort |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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