Correlation Between Tidal Trust and DBX ETF

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

Diversification Opportunities for Tidal Trust and DBX ETF

-0.72

Correlation Coefficient

Tidal Trust  DBX ETF

Pay attention - limited upside

The 3 months correlation between Tidal and DBX is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF Trust 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 DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of Tidal Trust i.e., Tidal Trust and DBX ETF go up and down completely randomly.

Pair Corralation between Tidal Trust and DBX ETF

Given the investment horizon of 90 days Tidal Trust II is expected to generate 111.01 times more return on investment than DBX ETF. However, Tidal Trust is 111.01 times more volatile than DBX ETF Trust. It trades about 0.09 of its potential returns per unit of risk. DBX ETF Trust is currently generating about 0.06 per unit of risk. If you would invest  0.00  in Tidal Trust II on September 23, 2024 and sell it today you would earn a total of  1,321  from holding Tidal Trust II or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	85.04%
Values	Daily Returns

Tidal Trust II  vs.  DBX ETF Trust

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.

DBX ETF Trust

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DBX ETF Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, DBX ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tidal Trust and DBX ETF

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

The idea behind Tidal Trust II and DBX 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.