Correlation Between AIM ETF and Tidal Trust

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

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

Diversification Opportunities for AIM ETF and Tidal Trust

-0.32

Correlation Coefficient

AIM ETF  Tidal Trust

Very good diversification

The 3 months correlation between AIM and Tidal is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and Tidal Trust II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust II and AIM ETF 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 AIM ETF Products 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 II has no effect on the direction of AIM ETF i.e., AIM ETF and Tidal Trust go up and down completely randomly.

Pair Corralation between AIM ETF and Tidal Trust

Given the investment horizon of 90 days AIM ETF Products is expected to generate 0.2 times more return on investment than Tidal Trust. However, AIM ETF Products is 5.12 times less risky than Tidal Trust. It trades about 0.16 of its potential returns per unit of risk. Tidal Trust II is currently generating about -0.07 per unit of risk. If you would invest  2,603  in AIM ETF Products on August 30, 2024 and sell it today you would earn a total of  77.00  from holding AIM ETF Products or generate 2.96% return on investment over 90 days.

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

AIM ETF Products  vs.  Tidal Trust II

AIM ETF Products

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AIM ETF Products are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, AIM ETF is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with AIM ETF and Tidal Trust

The main advantage of trading using opposite AIM ETF and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF 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.

The idea behind AIM ETF Products and Tidal Trust II 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.