Correlation Between Bitwise Funds and Tidal Trust

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

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

Diversification Opportunities for Bitwise Funds and Tidal Trust

0.89

Correlation Coefficient

Bitwise Funds  Tidal Trust

Very poor diversification

The 3 months correlation between Bitwise and Tidal is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Bitwise Funds Trust and Tidal Trust III in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust III and Bitwise Funds 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 Bitwise Funds Trust 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 III has no effect on the direction of Bitwise Funds i.e., Bitwise Funds and Tidal Trust go up and down completely randomly.

Pair Corralation between Bitwise Funds and Tidal Trust

Given the investment horizon of 90 days Bitwise Funds is expected to generate 1.02 times less return on investment than Tidal Trust. In addition to that, Bitwise Funds is 1.23 times more volatile than Tidal Trust III. It trades about 0.23 of its total potential returns per unit of risk. Tidal Trust III is currently generating about 0.29 per unit of volatility. If you would invest  2,403  in Tidal Trust III on May 21, 2025 and sell it today you would earn a total of  615.00  from holding Tidal Trust III or generate 25.59% return on investment over 90 days.

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

Bitwise Funds Trust  vs.  Tidal Trust III

Bitwise Funds Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitwise Funds Trust are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Bitwise Funds sustained solid returns over the last few months and may actually be approaching a breakup point.

Tidal Trust III

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tidal Trust III are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Tidal Trust unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bitwise Funds and Tidal Trust

The main advantage of trading using opposite Bitwise Funds and Tidal Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitwise Funds 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 Bitwise Funds Trust and Tidal Trust III 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.