Correlation Between Aptus Drawdown and Aptus Collared
Can any of the company-specific risk be diversified away by investing in both Aptus Drawdown and Aptus Collared 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 Drawdown and Aptus Collared into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptus Drawdown Managed and Aptus Collared Income, you can compare the effects of market volatilities on Aptus Drawdown and Aptus Collared 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 Drawdown with a short position of Aptus Collared. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptus Drawdown and Aptus Collared.
Diversification Opportunities for Aptus Drawdown and Aptus Collared
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aptus and Aptus is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Aptus Drawdown Managed and Aptus Collared Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptus Collared Income and Aptus Drawdown 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 Drawdown Managed are associated (or correlated) with Aptus Collared. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptus Collared Income has no effect on the direction of Aptus Drawdown i.e., Aptus Drawdown and Aptus Collared go up and down completely randomly.
Pair Corralation between Aptus Drawdown and Aptus Collared
Given the investment horizon of 90 days Aptus Drawdown Managed is expected to generate 1.31 times more return on investment than Aptus Collared. However, Aptus Drawdown is 1.31 times more volatile than Aptus Collared Income. It trades about 0.1 of its potential returns per unit of risk. Aptus Collared Income is currently generating about 0.12 per unit of risk. If you would invest 4,763 in Aptus Drawdown Managed on November 18, 2024 and sell it today you would earn a total of 65.00 from holding Aptus Drawdown Managed or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aptus Drawdown Managed vs. Aptus Collared Income
Performance |
| Timeline |
| Aptus Drawdown Managed |
| Aptus Collared Income |
Aptus Drawdown and Aptus Collared Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptus Drawdown and Aptus Collared
The main advantage of trading using opposite Aptus Drawdown and Aptus Collared positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptus Drawdown position performs unexpectedly, Aptus Collared 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 Aptus Collared will offset losses from the drop in Aptus Collared's long position.| Aptus Drawdown vs. Aptus Collared Income | Aptus Drawdown vs. Aptus Defined Risk | Aptus Drawdown vs. Anfield Equity Sector | Aptus Drawdown vs. Opus Small Cap |
| Aptus Collared vs. Aptus Drawdown Managed | Aptus Collared vs. Aptus Defined Risk | Aptus Collared vs. Opus Small Cap | Aptus Collared vs. Anfield Universal Fixed |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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