Correlation Between Tidal Trust and SSGA Active
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and SSGA Active 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 SSGA Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tidal Trust III and SSGA Active Trust, you can compare the effects of market volatilities on Tidal Trust and SSGA Active 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 SSGA Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and SSGA Active.
Diversification Opportunities for Tidal Trust and SSGA Active
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tidal and SSGA is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust III and SSGA Active Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSGA Active 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 III are associated (or correlated) with SSGA Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSGA Active Trust has no effect on the direction of Tidal Trust i.e., Tidal Trust and SSGA Active go up and down completely randomly.
Pair Corralation between Tidal Trust and SSGA Active
Given the investment horizon of 90 days Tidal Trust III is expected to generate 1.99 times more return on investment than SSGA Active. However, Tidal Trust is 1.99 times more volatile than SSGA Active Trust. It trades about 0.13 of its potential returns per unit of risk. SSGA Active Trust is currently generating about 0.11 per unit of risk. If you would invest 2,490 in Tidal Trust III on August 29, 2024 and sell it today you would earn a total of 94.00 from holding Tidal Trust III or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 22.89% |
| Values | Daily Returns |
Tidal Trust III vs. SSGA Active Trust
Performance |
| Timeline |
| Tidal Trust III |
| SSGA Active Trust |
Tidal Trust and SSGA Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and SSGA Active
The main advantage of trading using opposite Tidal Trust and SSGA Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, SSGA Active 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 SSGA Active will offset losses from the drop in SSGA Active's long position.| Tidal Trust vs. SSGA Active Trust | Tidal Trust vs. SPDR Nuveen Municipal | Tidal Trust vs. iShares Short Maturity | Tidal Trust vs. First Trust Flexible |
| SSGA Active vs. SSGA Active Trust | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SPDR Nuveen Municipal |
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 Stocks Directory module to find actively traded stocks across global markets.
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