Correlation Between Tidal ETF and ASPY

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

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

Diversification Opportunities for Tidal ETF and ASPY

-0.31

Correlation Coefficient

Tidal ETF  ASPY

Very good diversification

The 3 months correlation between Tidal and ASPY is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Tidal ETF Trust and ASPY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASPY and Tidal ETF 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 ETF Trust are associated (or correlated) with ASPY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASPY has no effect on the direction of Tidal ETF i.e., Tidal ETF and ASPY go up and down completely randomly.

Pair Corralation between Tidal ETF and ASPY

If you would invest  2,671  in ASPY on October 9, 2024 and sell it today you would earn a total of  0.00  from holding ASPY or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Tidal ETF Trust  vs.  ASPY

Tidal ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tidal ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

ASPY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASPY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, ASPY 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 ETF and ASPY

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

The idea behind Tidal ETF Trust and ASPY 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.