Correlation Between Tidal Trust and WisdomTree Inflation
Can any of the company-specific risk be diversified away by investing in both Tidal Trust and WisdomTree Inflation 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 WisdomTree Inflation 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 WisdomTree Inflation Plus, you can compare the effects of market volatilities on Tidal Trust and WisdomTree Inflation 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 WisdomTree Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and WisdomTree Inflation.
Diversification Opportunities for Tidal Trust and WisdomTree Inflation
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tidal and WisdomTree is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and WisdomTree Inflation Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Inflation Plus 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 WisdomTree Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Inflation Plus has no effect on the direction of Tidal Trust i.e., Tidal Trust and WisdomTree Inflation go up and down completely randomly.
Pair Corralation between Tidal Trust and WisdomTree Inflation
Given the investment horizon of 90 days Tidal Trust II is expected to under-perform the WisdomTree Inflation. In addition to that, Tidal Trust is 2.76 times more volatile than WisdomTree Inflation Plus. It trades about -0.34 of its total potential returns per unit of risk. WisdomTree Inflation Plus is currently generating about 0.24 per unit of volatility. If you would invest 2,990 in WisdomTree Inflation Plus on April 25, 2025 and sell it today you would earn a total of 107.00 from holding WisdomTree Inflation Plus or generate 3.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 38.71% |
Values | Daily Returns |
Tidal Trust II vs. WisdomTree Inflation Plus
Performance |
Timeline |
Tidal Trust II |
WisdomTree Inflation Plus |
Tidal Trust and WisdomTree Inflation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tidal Trust and WisdomTree Inflation
The main advantage of trading using opposite Tidal Trust and WisdomTree Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidal Trust position performs unexpectedly, WisdomTree Inflation 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 WisdomTree Inflation will offset losses from the drop in WisdomTree Inflation's long position.Tidal Trust vs. Tidal Trust II | Tidal Trust vs. T Rex 2X Long | Tidal Trust vs. Direxion Daily META | Tidal Trust vs. Direxion Daily META |
WisdomTree Inflation vs. Northern Lights | WisdomTree Inflation vs. Ocean Park International | WisdomTree Inflation vs. Northern Lights | WisdomTree Inflation vs. Northern Lights |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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