Correlation Between Tidal Trust and BlackRock Floating

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

Diversification Opportunities for Tidal Trust and BlackRock Floating

-0.01

Correlation Coefficient

Tidal Trust  BlackRock Floating

Good diversification

The 3 months correlation between Tidal and BlackRock is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and BlackRock Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Floating Rate 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 BlackRock Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Floating Rate has no effect on the direction of Tidal Trust i.e., Tidal Trust and BlackRock Floating go up and down completely randomly.

Pair Corralation between Tidal Trust and BlackRock Floating

Considering the 90-day investment horizon Tidal Trust II is expected to under-perform the BlackRock Floating. In addition to that, Tidal Trust is 6.18 times more volatile than BlackRock Floating Rate. It trades about -0.2 of its total potential returns per unit of risk. BlackRock Floating Rate is currently generating about -0.03 per unit of volatility. If you would invest  1,255  in BlackRock Floating Rate on December 29, 2024 and sell it today you would lose (12.00) from holding BlackRock Floating Rate or give up 0.96% of portfolio value over 90 days.

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

Tidal Trust II  vs.  BlackRock Floating Rate

Tidal Trust II

Risk-Adjusted Performance

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 weak performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

BlackRock Floating Rate

Risk-Adjusted Performance

Very Weak

Over the last 90 days BlackRock Floating Rate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, BlackRock Floating 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 BlackRock Floating

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

The idea behind Tidal Trust II and BlackRock Floating Rate 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.