Correlation Between Tidal ETF and Global X

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

Diversification Opportunities for Tidal ETF and Global X

0.69

Correlation Coefficient

Tidal ETF  Global X

Poor diversification

The 3 months correlation between Tidal and Global is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Tidal ETF Trust and Global X Disruptive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Disruptive 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Disruptive has no effect on the direction of Tidal ETF i.e., Tidal ETF and Global X go up and down completely randomly.

Pair Corralation between Tidal ETF and Global X

Allowing for the 90-day total investment horizon Tidal ETF Trust is expected to generate 0.8 times more return on investment than Global X. However, Tidal ETF Trust is 1.25 times less risky than Global X. It trades about 0.06 of its potential returns per unit of risk. Global X Disruptive is currently generating about -0.02 per unit of risk. If you would invest  2,579  in Tidal ETF Trust on December 2, 2024 and sell it today you would earn a total of  31.00  from holding Tidal ETF Trust or generate 1.2% return on investment over 90 days.

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

Tidal ETF Trust  vs.  Global X Disruptive

Tidal ETF Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tidal ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Global X Disruptive

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global X Disruptive has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with Tidal ETF and Global X

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

The idea behind Tidal ETF Trust and Global X Disruptive 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.