Correlation Between REX AI and Tidal ETF

Can any of the company-specific risk be diversified away by investing in both REX AI 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 REX AI and Tidal ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between REX AI Equity and Tidal ETF Trust, you can compare the effects of market volatilities on REX AI 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 REX AI with a short position of Tidal ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of REX AI and Tidal ETF.

Diversification Opportunities for REX AI and Tidal ETF

-0.2

Correlation Coefficient

REX AI  Tidal ETF

Good diversification

The 3 months correlation between REX and Tidal is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding REX AI Equity 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 REX AI 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 REX AI Equity 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 REX AI i.e., REX AI and Tidal ETF go up and down completely randomly.

Pair Corralation between REX AI and Tidal ETF

Given the investment horizon of 90 days REX AI Equity is expected to generate 0.59 times more return on investment than Tidal ETF. However, REX AI Equity is 1.69 times less risky than Tidal ETF. It trades about 0.15 of its potential returns per unit of risk. Tidal ETF Trust is currently generating about -0.06 per unit of risk. If you would invest  4,735  in REX AI Equity on October 6, 2024 and sell it today you would earn a total of  291.00  from holding REX AI Equity or generate 6.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

REX AI Equity  vs.  Tidal ETF Trust

REX AI Equity

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in REX AI Equity are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, REX AI may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Tidal ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tidal ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with REX AI and Tidal ETF

The main advantage of trading using opposite REX AI and Tidal ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REX AI 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.

The idea behind REX AI Equity and Tidal ETF Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .