Correlation Between PIMCO ETF and Tidal Trust

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

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

Diversification Opportunities for PIMCO ETF and Tidal Trust

0.0

Correlation Coefficient

PIMCO ETF  Tidal Trust

Pay attention - limited upside

The 3 months correlation between PIMCO and Tidal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO ETF Trust and Tidal Trust III in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust III and PIMCO 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 PIMCO ETF Trust 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 III has no effect on the direction of PIMCO ETF i.e., PIMCO ETF and Tidal Trust go up and down completely randomly.

Pair Corralation between PIMCO ETF and Tidal Trust

If you would invest  5,052  in PIMCO ETF Trust on December 28, 2024 and sell it today you would earn a total of  3.00  from holding PIMCO ETF Trust or generate 0.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PIMCO ETF Trust  vs.  Tidal Trust III

PIMCO ETF Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days PIMCO ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, PIMCO ETF is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Tidal Trust III

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tidal Trust III has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Tidal Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PIMCO ETF and Tidal Trust

The main advantage of trading using opposite PIMCO ETF and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO ETF 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 PIMCO ETF Trust and Tidal Trust III 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.