Correlation Between Tidal Trust and WisdomTree Managed
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and WisdomTree Managed 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 WisdomTree Managed 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 WisdomTree Managed Futures, you can compare the effects of market volatilities on Tidal Trust and WisdomTree Managed 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 WisdomTree Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and WisdomTree Managed.
Diversification Opportunities for Tidal Trust and WisdomTree Managed
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tidal and WisdomTree is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and WisdomTree Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Managed 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 WisdomTree Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Managed has no effect on the direction of Tidal Trust i.e., Tidal Trust and WisdomTree Managed go up and down completely randomly.
Pair Corralation between Tidal Trust and WisdomTree Managed
Allowing for the 90-day total investment horizon Tidal Trust is expected to generate 13.84 times less return on investment than WisdomTree Managed. But when comparing it to its historical volatility, Tidal Trust II is 1.45 times less risky than WisdomTree Managed. It trades about 0.03 of its potential returns per unit of risk. WisdomTree Managed Futures is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 3,291 in WisdomTree Managed Futures on April 5, 2025 and sell it today you would earn a total of 242.00 from holding WisdomTree Managed Futures or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tidal Trust II vs. WisdomTree Managed Futures
Performance |
| Timeline |
| Tidal Trust II |
| WisdomTree Managed |
Tidal Trust and WisdomTree Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tidal Trust and WisdomTree Managed
The main advantage of trading using opposite Tidal Trust and WisdomTree Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, WisdomTree Managed 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 WisdomTree Managed will offset losses from the drop in WisdomTree Managed's long position.| Tidal Trust vs. ProShares Merger ETF | Tidal Trust vs. Even Herd Long | Tidal Trust vs. Tidal Trust III | Tidal Trust vs. Efficient Market Portfolio |
| WisdomTree Managed vs. Tidal Trust II | WisdomTree Managed vs. ProShares Merger ETF | WisdomTree Managed vs. Even Herd Long | WisdomTree Managed vs. Tidal Trust III |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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