Correlation Between Aptus Collared and Northern Lights
Can any of the company-specific risk be diversified away by investing in both Aptus Collared and Northern Lights 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 Aptus Collared and Northern Lights into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptus Collared Income and Northern Lights, you can compare the effects of market volatilities on Aptus Collared and Northern Lights 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 Aptus Collared with a short position of Northern Lights. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptus Collared and Northern Lights.
Diversification Opportunities for Aptus Collared and Northern Lights
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aptus and Northern is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Aptus Collared Income and Northern Lights in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Lights and Aptus Collared 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 Aptus Collared Income are associated (or correlated) with Northern Lights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Lights has no effect on the direction of Aptus Collared i.e., Aptus Collared and Northern Lights go up and down completely randomly.
Pair Corralation between Aptus Collared and Northern Lights
Given the investment horizon of 90 days Aptus Collared Income is expected to generate 0.82 times more return on investment than Northern Lights. However, Aptus Collared Income is 1.23 times less risky than Northern Lights. It trades about 0.14 of its potential returns per unit of risk. Northern Lights is currently generating about 0.09 per unit of risk. If you would invest 3,305 in Aptus Collared Income on November 9, 2024 and sell it today you would earn a total of 819.00 from holding Aptus Collared Income or generate 24.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aptus Collared Income vs. Northern Lights
Performance |
| Timeline |
| Aptus Collared Income |
| Northern Lights |
Aptus Collared and Northern Lights Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptus Collared and Northern Lights
The main advantage of trading using opposite Aptus Collared and Northern Lights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptus Collared position performs unexpectedly, Northern Lights 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 Northern Lights will offset losses from the drop in Northern Lights' long position.| Aptus Collared vs. Aptus Drawdown Managed | Aptus Collared vs. Aptus Defined Risk | Aptus Collared vs. Opus Small Cap | Aptus Collared vs. Anfield Universal Fixed |
| Northern Lights vs. Northern Lights | Northern Lights vs. Innovator Nasdaq 100 Power | Northern Lights vs. ETF Series Solutions | Northern Lights vs. Strategy Shares NewfoundReSolve |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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