Correlation Between T REX and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both T REX 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 T REX and Tidal Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T REX 2X Long and Tidal Trust II, you can compare the effects of market volatilities on T REX 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 T REX with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of T REX and Tidal Trust.
Diversification Opportunities for T REX and Tidal Trust
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TSLT and Tidal is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding T REX 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 T REX 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 T REX 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 T REX i.e., T REX and Tidal Trust go up and down completely randomly.
Pair Corralation between T REX and Tidal Trust
Given the investment horizon of 90 days T REX 2X Long is expected to generate 5.99 times more return on investment than Tidal Trust. However, T REX is 5.99 times more volatile than Tidal Trust II. It trades about 0.37 of its potential returns per unit of risk. Tidal Trust II is currently generating about -0.06 per unit of risk. If you would invest 1,525 in T REX 2X Long on September 3, 2024 and sell it today you would earn a total of 1,383 from holding T REX 2X Long or generate 90.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
T REX 2X Long vs. Tidal Trust II
Performance |
| Timeline |
| T REX 2X |
| Tidal Trust II |
T REX and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T REX and Tidal Trust
The main advantage of trading using opposite T REX and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T REX 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.| T REX vs. ProShares Ultra SP500 | T REX vs. Direxion Daily SP500 | T REX vs. ProShares Ultra QQQ | T REX vs. Direxion Daily SP |
| Tidal Trust vs. Vanguard Total Stock | Tidal Trust vs. SPDR SP 500 | Tidal Trust vs. Vanguard Total Bond | Tidal Trust vs. Vanguard Value Index |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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