Correlation Between Tidal Trust and Tidal ETF

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

Diversification Opportunities for Tidal Trust and Tidal ETF

0.52

Correlation Coefficient

Tidal Trust  Tidal ETF

Very weak diversification

The 3 months correlation between Tidal and Tidal is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and Tidal ETF Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal ETF Services 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 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 Services has no effect on the direction of Tidal Trust i.e., Tidal Trust and Tidal ETF go up and down completely randomly.

Pair Corralation between Tidal Trust and Tidal ETF

If you would invest  2,102  in Tidal ETF Services on September 26, 2024 and sell it today you would earn a total of  0.00  from holding Tidal ETF Services or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	9.09%
Values	Daily Returns

Tidal Trust II  vs.  Tidal ETF Services

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. In spite of uncertain performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Tidal ETF Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tidal ETF Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic 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 Tidal Trust and Tidal ETF

The main advantage of trading using opposite Tidal Trust and Tidal ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust 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 Tidal Trust II and Tidal ETF Services 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.

Check out your portfolio center.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.