Correlation Between Main International and Tidal Trust

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

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

Diversification Opportunities for Main International and Tidal Trust

-0.57

Correlation Coefficient

Main International  Tidal Trust

Excellent diversification

The 3 months correlation between Main and Tidal is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Main International ETF and Tidal Trust II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust II and Main International 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 Main International ETF are associated (or correlated) with Tidal Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal Trust II has no effect on the direction of Main International i.e., Main International and Tidal Trust go up and down completely randomly.

Pair Corralation between Main International and Tidal Trust

Given the investment horizon of 90 days Main International is expected to generate 1.86 times less return on investment than Tidal Trust. But when comparing it to its historical volatility, Main International ETF is 1.49 times less risky than Tidal Trust. It trades about 0.04 of its potential returns per unit of risk. Tidal Trust II is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,493  in Tidal Trust II on October 9, 2024 and sell it today you would earn a total of  187.00  from holding Tidal Trust II or generate 12.53% return on investment over 90 days.

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

Main International ETF  vs.  Tidal Trust II

Main International ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Main International ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Main International is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Tidal Trust II

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tidal Trust II are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Tidal Trust displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Main International and Tidal Trust

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

The idea behind Main International ETF and Tidal Trust II 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.