Correlation Between Aptus Drawdown and LHA Market
Can any of the company-specific risk be diversified away by investing in both Aptus Drawdown and LHA Market 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 LHA Market 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 LHA Market State, you can compare the effects of market volatilities on Aptus Drawdown and LHA Market 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 LHA Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptus Drawdown and LHA Market.
Diversification Opportunities for Aptus Drawdown and LHA Market
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aptus and LHA is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aptus Drawdown Managed and LHA Market State in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LHA Market State 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 LHA Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LHA Market State has no effect on the direction of Aptus Drawdown i.e., Aptus Drawdown and LHA Market go up and down completely randomly.
Pair Corralation between Aptus Drawdown and LHA Market
Given the investment horizon of 90 days Aptus Drawdown Managed is expected to generate 1.33 times more return on investment than LHA Market. However, Aptus Drawdown is 1.33 times more volatile than LHA Market State. It trades about 0.19 of its potential returns per unit of risk. LHA Market State is currently generating about -0.03 per unit of risk. If you would invest 3,421 in Aptus Drawdown Managed on August 26, 2024 and sell it today you would earn a total of 1,326 from holding Aptus Drawdown Managed or generate 38.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aptus Drawdown Managed vs. LHA Market State
Performance |
| Timeline |
| Aptus Drawdown Managed |
| LHA Market State |
Aptus Drawdown and LHA Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptus Drawdown and LHA Market
The main advantage of trading using opposite Aptus Drawdown and LHA Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptus Drawdown position performs unexpectedly, LHA Market 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 LHA Market will offset losses from the drop in LHA Market's long position.| Aptus Drawdown vs. WisdomTree 9060 Balanced | Aptus Drawdown vs. RPAR Risk Parity | Aptus Drawdown vs. Cambria Tail Risk | Aptus Drawdown vs. Aptus Defined Risk |
| LHA Market vs. ETF Series Solutions | LHA Market vs. Northern Lights | LHA Market vs. Innovator Nasdaq 100 Power | LHA Market vs. Tidal ETF Trust |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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