Correlation Between SPDR Barclays and Tidal ETF
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and Tidal ETF 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 Barclays and Tidal ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Short and Tidal ETF Trust, you can compare the effects of market volatilities on SPDR Barclays and Tidal ETF 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 Barclays with a short position of Tidal ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Tidal ETF.
Diversification Opportunities for SPDR Barclays and Tidal ETF
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and Tidal is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Short and Tidal ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal ETF Trust and SPDR Barclays 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 Barclays Short are associated (or correlated) with Tidal ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal ETF Trust has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Tidal ETF go up and down completely randomly.
Pair Corralation between SPDR Barclays and Tidal ETF
Given the investment horizon of 90 days SPDR Barclays is expected to generate 10.72 times less return on investment than Tidal ETF. But when comparing it to its historical volatility, SPDR Barclays Short is 2.07 times less risky than Tidal ETF. It trades about 0.13 of its potential returns per unit of risk. Tidal ETF Trust is currently generating about 0.68 of returns per unit of risk over similar time horizon. If you would invest 1,859 in Tidal ETF Trust on September 1, 2024 and sell it today you would earn a total of 51.00 from holding Tidal ETF Trust or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SPDR Barclays Short vs. Tidal ETF Trust
Performance |
| Timeline |
| SPDR Barclays Short |
| Tidal ETF Trust |
SPDR Barclays and Tidal ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and Tidal ETF
The main advantage of trading using opposite SPDR Barclays and Tidal ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, Tidal ETF 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 ETF will offset losses from the drop in Tidal ETF's long position.| SPDR Barclays vs. SPDR Barclays Long | SPDR Barclays vs. SPDR Portfolio Intermediate | SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. SPDR Barclays Intermediate |
| Tidal ETF vs. SPDR Barclays Long | Tidal ETF vs. SPDR Portfolio Intermediate | Tidal ETF vs. SPDR Barclays Short | Tidal ETF vs. SPDR Barclays Intermediate |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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