Correlation Between AdvisorShares Gerber and Tidal ETF

Can any of the company-specific risk be diversified away by investing in both AdvisorShares Gerber and Tidal ETF 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 AdvisorShares Gerber and Tidal ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AdvisorShares Gerber Kawasaki and Tidal ETF Trust, you can compare the effects of market volatilities on AdvisorShares Gerber and Tidal ETF 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 AdvisorShares Gerber with a short position of Tidal ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of AdvisorShares Gerber and Tidal ETF.

Diversification Opportunities for AdvisorShares Gerber and Tidal ETF

-0.64

Correlation Coefficient

AdvisorShares Gerber  Tidal ETF

Excellent diversification

The 3 months correlation between AdvisorShares and Tidal is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding AdvisorShares Gerber Kawasaki and Tidal ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal ETF Trust and AdvisorShares Gerber 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 AdvisorShares Gerber Kawasaki are associated (or correlated) with Tidal ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal ETF Trust has no effect on the direction of AdvisorShares Gerber i.e., AdvisorShares Gerber and Tidal ETF go up and down completely randomly.

Pair Corralation between AdvisorShares Gerber and Tidal ETF

Allowing for the 90-day total investment horizon AdvisorShares Gerber Kawasaki is expected to generate 0.79 times more return on investment than Tidal ETF. However, AdvisorShares Gerber Kawasaki is 1.27 times less risky than Tidal ETF. It trades about 0.18 of its potential returns per unit of risk. Tidal ETF Trust is currently generating about -0.02 per unit of risk. If you would invest  2,029  in AdvisorShares Gerber Kawasaki on September 4, 2024 and sell it today you would earn a total of  228.00  from holding AdvisorShares Gerber Kawasaki or generate 11.24% return on investment over 90 days.

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

AdvisorShares Gerber Kawasaki  vs.  Tidal ETF Trust

AdvisorShares Gerber

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AdvisorShares Gerber Kawasaki are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile forward-looking signals, AdvisorShares Gerber may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tidal ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tidal ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Tidal ETF is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with AdvisorShares Gerber and Tidal ETF

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

The idea behind AdvisorShares Gerber Kawasaki and Tidal ETF Trust 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.