Correlation Between Tidal Trust and SWP Growth

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

Diversification Opportunities for Tidal Trust and SWP Growth

0.36

Correlation Coefficient

Tidal Trust  SWP Growth

Weak diversification

The 3 months correlation between Tidal and SWP is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and SWP Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWP Growth Income 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 SWP Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWP Growth Income has no effect on the direction of Tidal Trust i.e., Tidal Trust and SWP Growth go up and down completely randomly.

Pair Corralation between Tidal Trust and SWP Growth

Given the investment horizon of 90 days Tidal Trust is expected to generate 62.39 times less return on investment than SWP Growth. In addition to that, Tidal Trust is 2.17 times more volatile than SWP Growth Income. It trades about 0.0 of its total potential returns per unit of risk. SWP Growth Income is currently generating about 0.27 per unit of volatility. If you would invest  2,518  in SWP Growth Income on August 31, 2024 and sell it today you would earn a total of  115.00  from holding SWP Growth Income or generate 4.57% return on investment over 90 days.

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

Tidal Trust II  vs.  SWP Growth Income

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 unfluctuating performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

SWP Growth Income

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SWP Growth Income are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, SWP Growth may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Tidal Trust and SWP Growth

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

The idea behind Tidal Trust II and SWP Growth Income 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.