Correlation Between AdvisorShares STAR and Tidal Investments

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

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

Diversification Opportunities for AdvisorShares STAR and Tidal Investments

0.63

Correlation Coefficient

AdvisorShares STAR  Tidal Investments

Poor diversification

The 3 months correlation between AdvisorShares and Tidal is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding AdvisorShares STAR Global and Tidal Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Investments and AdvisorShares STAR 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 AdvisorShares STAR Global are associated (or correlated) with Tidal Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal Investments has no effect on the direction of AdvisorShares STAR i.e., AdvisorShares STAR and Tidal Investments go up and down completely randomly.

Pair Corralation between AdvisorShares STAR and Tidal Investments

Given the investment horizon of 90 days AdvisorShares STAR is expected to generate 1.88 times less return on investment than Tidal Investments. But when comparing it to its historical volatility, AdvisorShares STAR Global is 1.92 times less risky than Tidal Investments. It trades about 0.23 of its potential returns per unit of risk. Tidal Investments is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1,991  in Tidal Investments on May 8, 2025 and sell it today you would earn a total of  120.00  from holding Tidal Investments or generate 6.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	44.26%
Values	Daily Returns

AdvisorShares STAR Global  vs.  Tidal Investments

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 18 (%) 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 September 2025.

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 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AdvisorShares STAR and Tidal Investments

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

The idea behind AdvisorShares STAR Global and Tidal Investments 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.