Correlation Between Tidal Investments and AdvisorShares STAR

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

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

Diversification Opportunities for Tidal Investments and AdvisorShares STAR

0.61

Correlation Coefficient

Tidal Investments  AdvisorShares STAR

Poor diversification

The 3 months correlation between Tidal and AdvisorShares is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Investments and AdvisorShares STAR Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares STAR Global and Tidal Investments 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 Investments are associated (or correlated) with AdvisorShares STAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares STAR Global has no effect on the direction of Tidal Investments i.e., Tidal Investments and AdvisorShares STAR go up and down completely randomly.

Pair Corralation between Tidal Investments and AdvisorShares STAR

Given the investment horizon of 90 days Tidal Investments is expected to generate 1.95 times more return on investment than AdvisorShares STAR. However, Tidal Investments is 1.95 times more volatile than AdvisorShares STAR Global. It trades about 0.21 of its potential returns per unit of risk. AdvisorShares STAR Global is currently generating about 0.24 per unit of risk. If you would invest  1,989  in Tidal Investments on May 2, 2025 and sell it today you would earn a total of  122.00  from holding Tidal Investments or generate 6.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	50.0%
Values	Daily Returns

Tidal Investments  vs.  AdvisorShares STAR Global

Tidal Investments

Risk-Adjusted Performance

Solid

Over the last 90 days Tidal Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Tidal Investments may actually be approaching a critical reversion point that can send shares even higher in August 2025.

AdvisorShares STAR Global

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AdvisorShares STAR Global are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, AdvisorShares STAR may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Tidal Investments and AdvisorShares STAR

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

The idea behind Tidal Investments and AdvisorShares STAR Global 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.