Correlation Between Tidal Trust and Pacer Swan

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

Diversification Opportunities for Tidal Trust and Pacer Swan

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Tidal and Pacer is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and Pacer Swan SOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Swan SOS 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 Pacer Swan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Swan SOS has no effect on the direction of Tidal Trust i.e., Tidal Trust and Pacer Swan go up and down completely randomly.

Pair Corralation between Tidal Trust and Pacer Swan

Given the investment horizon of 90 days Tidal Trust II is expected to under-perform the Pacer Swan. In addition to that, Tidal Trust is 2.66 times more volatile than Pacer Swan SOS. It trades about -0.05 of its total potential returns per unit of risk. Pacer Swan SOS is currently generating about 0.15 per unit of volatility. If you would invest  2,097  in Pacer Swan SOS on September 5, 2024 and sell it today you would earn a total of  667.00  from holding Pacer Swan SOS or generate 31.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy78.59%
ValuesDaily Returns

Tidal Trust II  vs.  Pacer Swan SOS

 Performance 
       Timeline  
Tidal Trust II 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 rather sound basic indicators, Tidal Trust is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
Pacer Swan SOS 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Pacer Swan SOS are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, Pacer Swan is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Tidal Trust and Pacer Swan Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tidal Trust and Pacer Swan

The main advantage of trading using opposite Tidal Trust and Pacer Swan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, Pacer Swan 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 Pacer Swan will offset losses from the drop in Pacer Swan's long position.
The idea behind Tidal Trust II and Pacer Swan SOS 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.
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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