Correlation Between Tidal Trust and Adaptive Alpha

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

Diversification Opportunities for Tidal Trust and Adaptive Alpha

0.69

Correlation Coefficient

Tidal Trust  Adaptive Alpha

Poor diversification

The 3 months correlation between Tidal and Adaptive is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust I and Adaptive Alpha Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptive Alpha Oppor 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 Adaptive Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptive Alpha Oppor has no effect on the direction of Tidal Trust i.e., Tidal Trust and Adaptive Alpha go up and down completely randomly.

Pair Corralation between Tidal Trust and Adaptive Alpha

Given the investment horizon of 90 days Tidal Trust is expected to generate 1.74 times less return on investment than Adaptive Alpha. But when comparing it to its historical volatility, Tidal Trust I is 2.85 times less risky than Adaptive Alpha. It trades about 0.19 of its potential returns per unit of risk. Adaptive Alpha Opportunities is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,742  in Adaptive Alpha Opportunities on May 5, 2025 and sell it today you would earn a total of  220.00  from holding Adaptive Alpha Opportunities or generate 8.02% return on investment over 90 days.

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

Tidal Trust I  vs.  Adaptive Alpha Opportunities

Tidal Trust I

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tidal Trust I are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Tidal Trust is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Adaptive Alpha Oppor

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Adaptive Alpha Opportunities are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Adaptive Alpha may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Tidal Trust and Adaptive Alpha

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

The idea behind Tidal Trust I and Adaptive Alpha Opportunities 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.