Correlation Between Tidal Trust and IShares Dividend
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and IShares Dividend 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 IShares Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tidal Trust II and iShares Dividend and, you can compare the effects of market volatilities on Tidal Trust and IShares Dividend 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 IShares Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and IShares Dividend.
Diversification Opportunities for Tidal Trust and IShares Dividend
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tidal and IShares is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and iShares Dividend and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Dividend 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 II are associated (or correlated) with IShares Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Dividend has no effect on the direction of Tidal Trust i.e., Tidal Trust and IShares Dividend go up and down completely randomly.
Pair Corralation between Tidal Trust and IShares Dividend
Given the investment horizon of 90 days Tidal Trust II is expected to generate 7.51 times more return on investment than IShares Dividend. However, Tidal Trust is 7.51 times more volatile than iShares Dividend and. It trades about 0.09 of its potential returns per unit of risk. iShares Dividend and is currently generating about 0.09 per unit of risk. If you would invest 869.00 in Tidal Trust II on August 28, 2024 and sell it today you would earn a total of 673.00 from holding Tidal Trust II or generate 77.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.11% |
| Values | Daily Returns |
Tidal Trust II vs. iShares Dividend and
Performance |
| Timeline |
| Tidal Trust II |
| iShares Dividend |
Tidal Trust and IShares Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and IShares Dividend
The main advantage of trading using opposite Tidal Trust and IShares Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, IShares Dividend 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 IShares Dividend will offset losses from the drop in IShares Dividend's long position.| Tidal Trust vs. Grayscale Bitcoin Trust | Tidal Trust vs. Grayscale Bitcoin Mini | Tidal Trust vs. First Trust SkyBridge |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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