Correlation Between Core Alternative and Swan Hedged
Can any of the company-specific risk be diversified away by investing in both Core Alternative and Swan Hedged 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 Core Alternative and Swan Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Alternative ETF and Swan Hedged Equity, you can compare the effects of market volatilities on Core Alternative and Swan Hedged 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 Core Alternative with a short position of Swan Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Alternative and Swan Hedged.
Diversification Opportunities for Core Alternative and Swan Hedged
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Core and Swan is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Core Alternative ETF and Swan Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Hedged Equity and Core Alternative 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 Core Alternative ETF are associated (or correlated) with Swan Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Hedged Equity has no effect on the direction of Core Alternative i.e., Core Alternative and Swan Hedged go up and down completely randomly.
Pair Corralation between Core Alternative and Swan Hedged
Given the investment horizon of 90 days Core Alternative ETF is expected to under-perform the Swan Hedged. But the etf apears to be less risky and, when comparing its historical volatility, Core Alternative ETF is 1.0 times less risky than Swan Hedged. The etf trades about -0.06 of its potential returns per unit of risk. The Swan Hedged Equity is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,776 in Swan Hedged Equity on August 23, 2024 and sell it today you would earn a total of 486.00 from holding Swan Hedged Equity or generate 27.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Core Alternative ETF vs. Swan Hedged Equity
Performance |
| Timeline |
| Core Alternative ETF |
| Swan Hedged Equity |
Core Alternative and Swan Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Alternative and Swan Hedged
The main advantage of trading using opposite Core Alternative and Swan Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Alternative position performs unexpectedly, Swan Hedged 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 Swan Hedged will offset losses from the drop in Swan Hedged's long position.| Core Alternative vs. AGFiQ Market Neutral | Core Alternative vs. Cambria Global Momentum | Core Alternative vs. Cambria Global Asset | Core Alternative vs. Cambria Emerging Shareholder |
| Swan Hedged vs. Aptus Collared Income | Swan Hedged vs. Core Alternative ETF | Swan Hedged vs. Aptus Drawdown Managed | Swan Hedged vs. Amplify BlackSwan Growth |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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