Correlation Between GraniteShares and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both GraniteShares 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 GraniteShares and Tidal Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares 2x Long and Tidal Trust II, you can compare the effects of market volatilities on GraniteShares 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 GraniteShares with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and Tidal Trust.
Diversification Opportunities for GraniteShares and Tidal Trust
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GraniteShares and Tidal is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 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 GraniteShares 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 GraniteShares 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 GraniteShares i.e., GraniteShares and Tidal Trust go up and down completely randomly.
Pair Corralation between GraniteShares and Tidal Trust
Given the investment horizon of 90 days GraniteShares 2x Long is expected to under-perform the Tidal Trust. In addition to that, GraniteShares is 2.75 times more volatile than Tidal Trust II. It trades about -0.19 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 1,448 in Tidal Trust II on September 1, 2024 and sell it today you would lose (55.00) from holding Tidal Trust II or give up 3.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.67% |
| Values | Daily Returns |
GraniteShares 2x Long vs. Tidal Trust II
Performance |
| Timeline |
| GraniteShares 2x Long |
| Tidal Trust II |
GraniteShares and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and Tidal Trust
The main advantage of trading using opposite GraniteShares and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares 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.| GraniteShares vs. Tidal Trust II | GraniteShares vs. Tidal Trust II | GraniteShares vs. Direxion Daily META | GraniteShares vs. Direxion Daily META |
| Tidal Trust vs. Tidal Trust II | Tidal Trust vs. Direxion Daily META | Tidal Trust vs. Direxion Daily META | Tidal Trust vs. Tidal Trust II |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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