Correlation Between Tidal Trust and Bitwise Funds

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

Diversification Opportunities for Tidal Trust and Bitwise Funds

0.34

Correlation Coefficient

Tidal Trust  Bitwise Funds

Weak diversification

The 3 months correlation between Tidal and Bitwise is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and Bitwise Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitwise Funds Trust 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 Bitwise Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitwise Funds Trust has no effect on the direction of Tidal Trust i.e., Tidal Trust and Bitwise Funds go up and down completely randomly.

Pair Corralation between Tidal Trust and Bitwise Funds

Given the investment horizon of 90 days Tidal Trust II is expected to generate 0.32 times more return on investment than Bitwise Funds. However, Tidal Trust II is 3.08 times less risky than Bitwise Funds. It trades about 0.02 of its potential returns per unit of risk. Bitwise Funds Trust is currently generating about 0.01 per unit of risk. If you would invest  1,300  in Tidal Trust II on May 13, 2025 and sell it today you would earn a total of  10.63  from holding Tidal Trust II or generate 0.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Tidal Trust II  vs.  Bitwise Funds Trust

Tidal Trust II

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tidal Trust II are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Tidal Trust is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Bitwise Funds Trust

Risk-Adjusted Performance

Weakest

Over the last 90 days Bitwise Funds Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bitwise Funds is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Tidal Trust and Bitwise Funds

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

The idea behind Tidal Trust II and Bitwise Funds Trust 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.