Correlation Between XRP and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both XRP 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 XRP and Tidal Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XRP and Tidal Trust II, you can compare the effects of market volatilities on XRP 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 XRP with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and Tidal Trust.
Diversification Opportunities for XRP and Tidal Trust
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between XRP and Tidal is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Tidal Trust II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust II and XRP 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 XRP 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 II has no effect on the direction of XRP i.e., XRP and Tidal Trust go up and down completely randomly.
Pair Corralation between XRP and Tidal Trust
Assuming the 90 days trading horizon XRP is expected to generate 11.33 times more return on investment than Tidal Trust. However, XRP is 11.33 times more volatile than Tidal Trust II. It trades about 0.04 of its potential returns per unit of risk. Tidal Trust II is currently generating about 0.0 per unit of risk. If you would invest 224.00 in XRP on December 18, 2024 and sell it today you would earn a total of 15.00 from holding XRP or generate 6.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 93.65% |
Values | Daily Returns |
XRP vs. Tidal Trust II
Performance |
Timeline |
XRP |
Tidal Trust II |
XRP and Tidal Trust Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with XRP and Tidal Trust
The main advantage of trading using opposite XRP and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP 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 XRP and Tidal Trust II 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.Tidal Trust vs. Trust For Professional | Tidal Trust vs. Invesco High Yield | Tidal Trust vs. Invesco BulletShares 2032 | Tidal Trust vs. Timothy Plan Market |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |