Correlation Between SPDR SSgA and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both SPDR SSgA 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 SPDR SSgA and Tidal Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SSgA Multi Asset and Tidal Trust II, you can compare the effects of market volatilities on SPDR SSgA 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 SPDR SSgA with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSgA and Tidal Trust.
Diversification Opportunities for SPDR SSgA and Tidal Trust
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Tidal is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSgA Multi Asset 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 SPDR SSgA 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 SPDR SSgA Multi Asset 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 SPDR SSgA i.e., SPDR SSgA and Tidal Trust go up and down completely randomly.
Pair Corralation between SPDR SSgA and Tidal Trust
Considering the 90-day investment horizon SPDR SSgA is expected to generate 2.58 times less return on investment than Tidal Trust. In addition to that, SPDR SSgA is 1.53 times more volatile than Tidal Trust II. It trades about 0.03 of its total potential returns per unit of risk. Tidal Trust II is currently generating about 0.11 per unit of volatility. If you would invest 1,950 in Tidal Trust II on September 1, 2024 and sell it today you would earn a total of 361.00 from holding Tidal Trust II or generate 18.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 73.68% |
| Values | Daily Returns |
SPDR SSgA Multi Asset vs. Tidal Trust II
Performance |
| Timeline |
| SPDR SSgA Multi |
| Tidal Trust II |
SPDR SSgA and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SSgA and Tidal Trust
The main advantage of trading using opposite SPDR SSgA and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SSgA 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.| SPDR SSgA vs. SPDR SSgA Global | SPDR SSgA vs. SPDR SSgA Income | SPDR SSgA vs. VanEck Inflation Allocation | SPDR SSgA vs. SPDR MSCI EAFE |
| Tidal Trust vs. ProShares Merger ETF | Tidal Trust vs. Even Herd Long | Tidal Trust vs. Simplify Exchange Traded | Tidal Trust vs. Tuttle Capital Shareholders |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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