Correlation Between Northern Lights and Tidal Trust
Can any of the company-specific risk be diversified away by investing in both Northern Lights 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 Northern Lights and Tidal Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Lights and Tidal Trust I, you can compare the effects of market volatilities on Northern Lights 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 Northern Lights with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Lights and Tidal Trust.
Diversification Opportunities for Northern Lights and Tidal Trust
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Northern and Tidal is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Northern Lights and Tidal Trust I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust I and Northern Lights 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 Northern Lights 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 I has no effect on the direction of Northern Lights i.e., Northern Lights and Tidal Trust go up and down completely randomly.
Pair Corralation between Northern Lights and Tidal Trust
Given the investment horizon of 90 days Northern Lights is expected to under-perform the Tidal Trust. But the etf apears to be less risky and, when comparing its historical volatility, Northern Lights is 1.22 times less risky than Tidal Trust. The etf trades about -0.01 of its potential returns per unit of risk. The Tidal Trust I is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,504 in Tidal Trust I on August 28, 2025 and sell it today you would earn a total of 5.02 from holding Tidal Trust I or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 81.25% |
| Values | Daily Returns |
Northern Lights vs. Tidal Trust I
Performance |
| Timeline |
| Northern Lights |
| Tidal Trust I |
Northern Lights and Tidal Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Lights and Tidal Trust
The main advantage of trading using opposite Northern Lights and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Lights 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.| Northern Lights vs. FT Vest Equity | Northern Lights vs. Diamond Hill Funds | Northern Lights vs. Dimensional International High | Northern Lights vs. JPMorgan Fundamental Data |
| Tidal Trust vs. FT Vest Equity | Tidal Trust vs. Northern Lights | Tidal Trust vs. Diamond Hill Funds | Tidal Trust vs. Dimensional International High |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |