Correlation Between Tidal Trust and Amplify BlackSwan

Can any of the company-specific risk be diversified away by investing in both Tidal Trust and Amplify BlackSwan 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 Amplify BlackSwan 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 Amplify BlackSwan Growth, you can compare the effects of market volatilities on Tidal Trust and Amplify BlackSwan 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 Amplify BlackSwan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and Amplify BlackSwan.

Diversification Opportunities for Tidal Trust and Amplify BlackSwan

-0.41

Correlation Coefficient

Tidal Trust  Amplify BlackSwan

Very good diversification

The 3 months correlation between Tidal and Amplify is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and Amplify BlackSwan Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify BlackSwan Growth 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 Amplify BlackSwan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify BlackSwan Growth has no effect on the direction of Tidal Trust i.e., Tidal Trust and Amplify BlackSwan go up and down completely randomly.

Pair Corralation between Tidal Trust and Amplify BlackSwan

Given the investment horizon of 90 days Tidal Trust II is expected to generate 1.74 times more return on investment than Amplify BlackSwan. However, Tidal Trust is 1.74 times more volatile than Amplify BlackSwan Growth. It trades about 0.18 of its potential returns per unit of risk. Amplify BlackSwan Growth is currently generating about -0.05 per unit of risk. If you would invest  1,993  in Tidal Trust II on December 22, 2024 and sell it today you would earn a total of  202.00  from holding Tidal Trust II or generate 10.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	73.33%
Values	Daily Returns

Tidal Trust II  vs.  Amplify BlackSwan Growth

Tidal Trust II

Risk-Adjusted Performance

Good

Over the last 90 days Tidal Trust II has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unfluctuating basic indicators, Tidal Trust exhibited solid returns over the last few months and may actually be approaching a breakup point.

Amplify BlackSwan Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amplify BlackSwan Growth has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Amplify BlackSwan is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Tidal Trust and Amplify BlackSwan

The main advantage of trading using opposite Tidal Trust and Amplify BlackSwan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, Amplify BlackSwan 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 Amplify BlackSwan will offset losses from the drop in Amplify BlackSwan's long position.

The idea behind Tidal Trust II and Amplify BlackSwan Growth 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.