Correlation Between Tidal Trust and FundX Investment

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

By analyzing existing cross correlation between Tidal Trust III and FundX Investment Trust, you can compare the effects of market volatilities on Tidal Trust and FundX Investment 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 FundX Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and FundX Investment.

Diversification Opportunities for Tidal Trust and FundX Investment

0.14

Correlation Coefficient

Tidal Trust  FundX Investment

Average diversification

The 3 months correlation between Tidal and FundX is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust III and FundX Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX Investment 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 III are associated (or correlated) with FundX Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX Investment Trust has no effect on the direction of Tidal Trust i.e., Tidal Trust and FundX Investment go up and down completely randomly.

Pair Corralation between Tidal Trust and FundX Investment

Given the investment horizon of 90 days Tidal Trust III is expected to generate 1068.34 times more return on investment than FundX Investment. However, Tidal Trust is 1068.34 times more volatile than FundX Investment Trust. It trades about 0.32 of its potential returns per unit of risk. FundX Investment Trust is currently generating about 0.23 per unit of risk. If you would invest  0.00  in Tidal Trust III on September 3, 2024 and sell it today you would earn a total of  2,023  from holding Tidal Trust III or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	50.0%
Values	Daily Returns

Tidal Trust III  vs.  FundX Investment Trust

Tidal Trust III

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tidal Trust III are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Tidal Trust demonstrated solid returns over the last few months and may actually be approaching a breakup point.

FundX Investment Trust

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FundX Investment Trust are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, FundX Investment is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tidal Trust and FundX Investment

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

The idea behind Tidal Trust III and FundX Investment 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.