Correlation Between Aptus Drawdown and ETF Series
Can any of the company-specific risk be diversified away by investing in both Aptus Drawdown and ETF Series 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 ETF Series 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 ETF Series Solutions, you can compare the effects of market volatilities on Aptus Drawdown and ETF Series 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 ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptus Drawdown and ETF Series.
Diversification Opportunities for Aptus Drawdown and ETF Series
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aptus and ETF is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Aptus Drawdown Managed and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions 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 ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of Aptus Drawdown i.e., Aptus Drawdown and ETF Series go up and down completely randomly.
Pair Corralation between Aptus Drawdown and ETF Series
Given the investment horizon of 90 days Aptus Drawdown Managed is expected to generate 0.87 times more return on investment than ETF Series. However, Aptus Drawdown Managed is 1.15 times less risky than ETF Series. It trades about 0.16 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.13 per unit of risk. If you would invest 3,690 in Aptus Drawdown Managed on August 26, 2024 and sell it today you would earn a total of 1,057 from holding Aptus Drawdown Managed or generate 28.64% 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. ETF Series Solutions
Performance |
| Timeline |
| Aptus Drawdown Managed |
| ETF Series Solutions |
Aptus Drawdown and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptus Drawdown and ETF Series
The main advantage of trading using opposite Aptus Drawdown and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptus Drawdown position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' 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 |
| ETF Series vs. FT Vest Equity | ETF Series vs. Northern Lights | ETF Series vs. Dimensional International High | ETF Series vs. First Trust Exchange Traded |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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