Correlation Between Gotham Large and Tidal ETF

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

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

Diversification Opportunities for Gotham Large and Tidal ETF

0.75

Correlation Coefficient

Gotham Large  Tidal ETF

Poor diversification

The 3 months correlation between Gotham and Tidal is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Gotham Large Value and Tidal ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal ETF Trust and Gotham Large 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 Gotham Large Value are associated (or correlated) with Tidal ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal ETF Trust has no effect on the direction of Gotham Large i.e., Gotham Large and Tidal ETF go up and down completely randomly.

Pair Corralation between Gotham Large and Tidal ETF

Assuming the 90 days horizon Gotham Large Value is expected to under-perform the Tidal ETF. In addition to that, Gotham Large is 1.95 times more volatile than Tidal ETF Trust. It trades about -0.07 of its total potential returns per unit of risk. Tidal ETF Trust is currently generating about 0.06 per unit of volatility. If you would invest  2,395  in Tidal ETF Trust on October 26, 2024 and sell it today you would earn a total of  64.00  from holding Tidal ETF Trust or generate 2.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Gotham Large Value  vs.  Tidal ETF Trust

Gotham Large Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gotham Large Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Tidal ETF Trust

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tidal ETF Trust are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Tidal ETF is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gotham Large and Tidal ETF

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

The idea behind Gotham Large Value and Tidal 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.