Correlation Between Tidal ETF and Sprott Physical

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

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

Diversification Opportunities for Tidal ETF and Sprott Physical

0.41

Correlation Coefficient

Tidal ETF  Sprott Physical

Very weak diversification

The 3 months correlation between Tidal and Sprott is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Tidal ETF Trust and Sprott Physical Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Platinum and Tidal ETF 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 ETF Trust are associated (or correlated) with Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Platinum has no effect on the direction of Tidal ETF i.e., Tidal ETF and Sprott Physical go up and down completely randomly.

Pair Corralation between Tidal ETF and Sprott Physical

Given the investment horizon of 90 days Tidal ETF Trust is expected to under-perform the Sprott Physical. But the etf apears to be less risky and, when comparing its historical volatility, Tidal ETF Trust is 1.92 times less risky than Sprott Physical. The etf trades about -0.1 of its potential returns per unit of risk. The Sprott Physical Platinum is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  961.00  in Sprott Physical Platinum on January 25, 2024 and sell it today you would earn a total of  5.00  from holding Sprott Physical Platinum or generate 0.52% return on investment over 90 days.

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

Tidal ETF Trust  vs.  Sprott Physical Platinum

Tidal ETF Trust

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tidal ETF Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Tidal ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sprott Physical Platinum

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Platinum are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Sprott Physical is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Tidal ETF and Sprott Physical

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

The idea behind Tidal ETF Trust and Sprott Physical Platinum 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.