Correlation Between Volatility Shares and FundX Aggressive
Can any of the company-specific risk be diversified away by investing in both Volatility Shares and FundX Aggressive 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 Volatility Shares and FundX Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volatility Shares Trust and FundX Aggressive ETF, you can compare the effects of market volatilities on Volatility Shares and FundX Aggressive 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 Volatility Shares with a short position of FundX Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volatility Shares and FundX Aggressive.
Diversification Opportunities for Volatility Shares and FundX Aggressive
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Volatility and FundX is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Volatility Shares Trust and FundX Aggressive ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX Aggressive ETF and Volatility Shares 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 Volatility Shares Trust are associated (or correlated) with FundX Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX Aggressive ETF has no effect on the direction of Volatility Shares i.e., Volatility Shares and FundX Aggressive go up and down completely randomly.
Pair Corralation between Volatility Shares and FundX Aggressive
Given the investment horizon of 90 days Volatility Shares Trust is expected to generate 6.2 times more return on investment than FundX Aggressive. However, Volatility Shares is 6.2 times more volatile than FundX Aggressive ETF. It trades about 0.1 of its potential returns per unit of risk. FundX Aggressive ETF is currently generating about 0.08 per unit of risk. If you would invest 1,346 in Volatility Shares Trust on September 3, 2024 and sell it today you would earn a total of 4,674 from holding Volatility Shares Trust or generate 347.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 73.13% |
| Values | Daily Returns |
Volatility Shares Trust vs. FundX Aggressive ETF
Performance |
| Timeline |
| Volatility Shares Trust |
| FundX Aggressive ETF |
Volatility Shares and FundX Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volatility Shares and FundX Aggressive
The main advantage of trading using opposite Volatility Shares and FundX Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volatility Shares position performs unexpectedly, FundX Aggressive 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 FundX Aggressive will offset losses from the drop in FundX Aggressive's long position.| Volatility Shares vs. Grayscale Bitcoin Trust | Volatility Shares vs. ProShares Bitcoin Strategy | Volatility Shares vs. Amplify Transformational Data | Volatility Shares vs. First Trust Indxx |
| FundX Aggressive vs. Series Portfolios Trust | FundX Aggressive vs. FT Vest Equity | FundX Aggressive vs. Zillow Group Class | FundX Aggressive vs. Northern Lights |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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