Correlation Between Tidal Trust and ProShares Hedge

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

By analyzing existing cross correlation between Tidal Trust I and ProShares Hedge Replication, you can compare the effects of market volatilities on Tidal Trust and ProShares Hedge 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 ProShares Hedge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tidal Trust and ProShares Hedge.

Diversification Opportunities for Tidal Trust and ProShares Hedge

0.92

Correlation Coefficient

Tidal Trust  ProShares Hedge

Almost no diversification

The 3 months correlation between Tidal and ProShares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust I and ProShares Hedge Replication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Hedge Repl 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 I are associated (or correlated) with ProShares Hedge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Hedge Repl has no effect on the direction of Tidal Trust i.e., Tidal Trust and ProShares Hedge go up and down completely randomly.

Pair Corralation between Tidal Trust and ProShares Hedge

Given the investment horizon of 90 days Tidal Trust I is expected to generate 3.43 times more return on investment than ProShares Hedge. However, Tidal Trust is 3.43 times more volatile than ProShares Hedge Replication. It trades about 0.1 of its potential returns per unit of risk. ProShares Hedge Replication is currently generating about 0.15 per unit of risk. If you would invest  2,586  in Tidal Trust I on May 4, 2025 and sell it today you would earn a total of  140.00  from holding Tidal Trust I or generate 5.41% return on investment over 90 days.

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

Tidal Trust I  vs.  ProShares Hedge Replication

Tidal Trust I

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tidal Trust I are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Tidal Trust is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

ProShares Hedge Repl

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Hedge Replication are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, ProShares Hedge is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tidal Trust and ProShares Hedge

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

The idea behind Tidal Trust I and ProShares Hedge Replication 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.