Correlation Between Amazon and Tidal Trust

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

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

Diversification Opportunities for Amazon and Tidal Trust

0.79

Correlation Coefficient

Amazon  Tidal Trust

Poor diversification

The 3 months correlation between Amazon and Tidal is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc 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 Amazon 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 Amazon Inc 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 Amazon i.e., Amazon and Tidal Trust go up and down completely randomly.

Pair Corralation between Amazon and Tidal Trust

Given the investment horizon of 90 days Amazon Inc is expected to under-perform the Tidal Trust. In addition to that, Amazon is 1.87 times more volatile than Tidal Trust II. It trades about -0.08 of its total potential returns per unit of risk. Tidal Trust II is currently generating about -0.14 per unit of volatility. If you would invest  2,471  in Tidal Trust II on December 28, 2024 and sell it today you would lose (189.00) from holding Tidal Trust II or give up 7.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Amazon Inc  vs.  Tidal Trust II

Amazon Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amazon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Tidal Trust II

Risk-Adjusted Performance

Very Weak

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 latest uncertain performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Amazon and Tidal Trust

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

The idea behind Amazon Inc and Tidal Trust II 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.