Correlation Between Tidal Trust and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and IShares 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 Tidal Trust and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tidal Trust II and iShares Trust , you can compare the effects of market volatilities on Tidal Trust and IShares 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 Tidal Trust with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and IShares Trust.
Diversification Opportunities for Tidal Trust and IShares Trust
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tidal and IShares is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and Tidal Trust 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 Tidal Trust II are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Tidal Trust i.e., Tidal Trust and IShares Trust go up and down completely randomly.
Pair Corralation between Tidal Trust and IShares Trust
Given the investment horizon of 90 days Tidal Trust II is expected to generate 8.69 times more return on investment than IShares Trust. However, Tidal Trust is 8.69 times more volatile than iShares Trust . It trades about 0.12 of its potential returns per unit of risk. iShares Trust is currently generating about 0.07 per unit of risk. If you would invest 990.00 in Tidal Trust II on August 25, 2024 and sell it today you would earn a total of 95.00 from holding Tidal Trust II or generate 9.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tidal Trust II vs. iShares Trust
Performance |
| Timeline |
| Tidal Trust II |
| iShares Trust |
Tidal Trust and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and IShares Trust
The main advantage of trading using opposite Tidal Trust and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, IShares 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 IShares Trust will offset losses from the drop in IShares Trust's long position.| Tidal Trust vs. Tidal Trust II | Tidal Trust vs. Tidal Trust II | Tidal Trust vs. Simplify Volatility Premium | Tidal Trust vs. Tidal Trust II |
| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. Simplify Volatility Premium | IShares 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |