Correlation Between Tidal Trust and Howard Hughes

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

Diversification Opportunities for Tidal Trust and Howard Hughes

-0.3

Correlation Coefficient

Tidal Trust  Howard Hughes

Very good diversification

The 3 months correlation between Tidal and Howard is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and Howard Hughes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Howard Hughes 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 Howard Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Howard Hughes has no effect on the direction of Tidal Trust i.e., Tidal Trust and Howard Hughes go up and down completely randomly.

Pair Corralation between Tidal Trust and Howard Hughes

Given the investment horizon of 90 days Tidal Trust is expected to generate 1.18 times less return on investment than Howard Hughes. But when comparing it to its historical volatility, Tidal Trust II is 1.7 times less risky than Howard Hughes. It trades about 0.02 of its potential returns per unit of risk. Howard Hughes is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  7,281  in Howard Hughes on September 20, 2024 and sell it today you would earn a total of  357.00  from holding Howard Hughes or generate 4.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	46.17%
Values	Daily Returns

Tidal Trust II  vs.  Howard Hughes

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 latest unfluctuating performance, the Etf's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Howard Hughes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Howard Hughes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Howard Hughes is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Tidal Trust and Howard Hughes

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

The idea behind Tidal Trust II and Howard Hughes 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.