Correlation Between IShares National and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both IShares National 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 IShares National and Tidal Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares National Muni and Tidal Trust III, you can compare the effects of market volatilities on IShares National 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 IShares National with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares National and Tidal Trust.
Diversification Opportunities for IShares National and Tidal Trust
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Tidal is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding iShares National Muni 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 IShares National 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 iShares National Muni 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 IShares National i.e., IShares National and Tidal Trust go up and down completely randomly.
Pair Corralation between IShares National and Tidal Trust
Considering the 90-day investment horizon iShares National Muni is expected to generate 0.72 times more return on investment than Tidal Trust. However, iShares National Muni is 1.39 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 10,716 in iShares National Muni on September 3, 2024 and sell it today you would earn a total of 138.00 from holding iShares National Muni or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares National Muni vs. Tidal Trust III
Performance |
| Timeline |
| iShares National Muni |
| Tidal Trust III |
IShares National and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares National and Tidal Trust
The main advantage of trading using opposite IShares National and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares National 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.| IShares National vs. iShares JP Morgan | IShares National vs. iShares iBoxx Investment | IShares National vs. SPDR Nuveen Bloomberg | IShares National vs. VanEck High Yield |
| Tidal Trust vs. VanEck Vectors Moodys | Tidal Trust vs. Xtrackers California Municipal | Tidal Trust vs. Vanguard ESG Corporate | Tidal Trust vs. Vanguard Intermediate Term Corporate |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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