Correlation Between Tidal Trust and WisdomTree International

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

Diversification Opportunities for Tidal Trust and WisdomTree International

0.54

Correlation Coefficient

Tidal Trust  WisdomTree International

Very weak diversification

The 3 months correlation between Tidal and WisdomTree is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and WisdomTree International Effic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International 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 WisdomTree International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree International has no effect on the direction of Tidal Trust i.e., Tidal Trust and WisdomTree International go up and down completely randomly.

Pair Corralation between Tidal Trust and WisdomTree International

Allowing for the 90-day total investment horizon Tidal Trust II is expected to generate 0.26 times more return on investment than WisdomTree International. However, Tidal Trust II is 3.91 times less risky than WisdomTree International. It trades about -0.24 of its potential returns per unit of risk. WisdomTree International Efficient is currently generating about -0.08 per unit of risk. If you would invest  2,310  in Tidal Trust II on September 23, 2024 and sell it today you would lose (25.00) from holding Tidal Trust II or give up 1.08% of portfolio value over 90 days.

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

Tidal Trust II  vs.  WisdomTree International Effic

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. Despite nearly stable technical and fundamental indicators, Tidal Trust is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

WisdomTree International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WisdomTree International Efficient has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Etf's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

Pair Trading with Tidal Trust and WisdomTree International

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

The idea behind Tidal Trust II and WisdomTree International Efficient 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.