Correlation Between Vanguard Extended and Tidal ETF
Can any of the company-specific risk be diversified away by investing in both Vanguard Extended 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 Vanguard Extended and Tidal ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Extended Market and Tidal ETF Trust, you can compare the effects of market volatilities on Vanguard Extended 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 Vanguard Extended with a short position of Tidal ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Extended and Tidal ETF.
Diversification Opportunities for Vanguard Extended and Tidal ETF
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vanguard and Tidal is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Extended Market 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 Vanguard Extended 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 Vanguard Extended Market 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 Vanguard Extended i.e., Vanguard Extended and Tidal ETF go up and down completely randomly.
Pair Corralation between Vanguard Extended and Tidal ETF
Considering the 90-day investment horizon Vanguard Extended Market is expected to generate 0.98 times more return on investment than Tidal ETF. However, Vanguard Extended Market is 1.02 times less risky than Tidal ETF. It trades about 0.26 of its potential returns per unit of risk. Tidal ETF Trust is currently generating about 0.15 per unit of risk. If you would invest 18,006 in Vanguard Extended Market on August 26, 2024 and sell it today you would earn a total of 2,336 from holding Vanguard Extended Market or generate 12.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Extended Market vs. Tidal ETF Trust
Performance |
| Timeline |
| Vanguard Extended Market |
| Tidal ETF Trust |
Vanguard Extended and Tidal ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Extended and Tidal ETF
The main advantage of trading using opposite Vanguard Extended and Tidal ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Extended 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.| Vanguard Extended vs. Vanguard Large Cap Index | Vanguard Extended vs. Vanguard Small Cap Growth | Vanguard Extended vs. Vanguard Mid Cap Index | Vanguard Extended vs. Vanguard Mid Cap Growth |
| Tidal ETF vs. Vanguard Mid Cap Index | Tidal ETF vs. Vanguard Extended Market | Tidal ETF vs. iShares Core SP | Tidal ETF vs. SPDR SP MIDCAP |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Stocks Directory Find actively traded stocks across global markets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |