Correlation Between WisdomTree Inflation and Tidal Trust

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

By analyzing existing cross correlation between WisdomTree Inflation Plus and Tidal Trust II, you can compare the effects of market volatilities on WisdomTree Inflation and Tidal Trust 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 WisdomTree Inflation with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Inflation and Tidal Trust.

Diversification Opportunities for WisdomTree Inflation and Tidal Trust

0.77

Correlation Coefficient

WisdomTree Inflation  Tidal Trust

Poor diversification

The 3 months correlation between WisdomTree and Tidal is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Inflation Plus and Tidal Trust II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust II and WisdomTree Inflation 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 WisdomTree Inflation Plus are associated (or correlated) with Tidal Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal Trust II has no effect on the direction of WisdomTree Inflation i.e., WisdomTree Inflation and Tidal Trust go up and down completely randomly.

Pair Corralation between WisdomTree Inflation and Tidal Trust

Given the investment horizon of 90 days WisdomTree Inflation Plus is expected to generate 0.12 times more return on investment than Tidal Trust. However, WisdomTree Inflation Plus is 8.58 times less risky than Tidal Trust. It trades about 0.25 of its potential returns per unit of risk. Tidal Trust II is currently generating about -0.22 per unit of risk. If you would invest  2,963  in WisdomTree Inflation Plus on August 15, 2025 and sell it today you would earn a total of  275.00  from holding WisdomTree Inflation Plus or generate 9.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	50.0%
Values	Daily Returns

WisdomTree Inflation Plus  vs.  Tidal Trust II

WisdomTree Inflation Plus

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Inflation Plus are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady forward indicators, WisdomTree Inflation may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Tidal Trust II

Risk-Adjusted Performance

Weakest

Over the last 90 days Tidal Trust II has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's fundamental indicators remain very healthy which may send shares a bit higher in December 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with WisdomTree Inflation and Tidal Trust

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

The idea behind WisdomTree Inflation Plus and Tidal Trust II 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.