Correlation Between Tidal Trust and IShares Paris

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

Diversification Opportunities for Tidal Trust and IShares Paris

0.69

Correlation Coefficient

Tidal Trust  IShares Paris

Poor diversification

The 3 months correlation between Tidal and IShares is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and iShares Paris Aligned Climate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Paris Aligned 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 Paris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Paris Aligned has no effect on the direction of Tidal Trust i.e., Tidal Trust and IShares Paris go up and down completely randomly.

Pair Corralation between Tidal Trust and IShares Paris

Given the investment horizon of 90 days Tidal Trust II is expected to under-perform the IShares Paris. In addition to that, Tidal Trust is 2.28 times more volatile than iShares Paris Aligned Climate. It trades about -0.12 of its total potential returns per unit of risk. iShares Paris Aligned Climate is currently generating about -0.05 per unit of volatility. If you would invest  5,554  in iShares Paris Aligned Climate on September 12, 2024 and sell it today you would lose (149.00) from holding iShares Paris Aligned Climate or give up 2.68% of portfolio value over 90 days.

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

Tidal Trust II  vs.  iShares Paris Aligned Climate

Tidal Trust II

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

iShares Paris Aligned

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Paris Aligned Climate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, IShares Paris is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Tidal Trust and IShares Paris

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

The idea behind Tidal Trust II and iShares Paris Aligned Climate 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.