Correlation Between FT Vest and MKAM ETF
Can any of the company-specific risk be diversified away by investing in both FT Vest and MKAM ETF 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 FT Vest and MKAM ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FT Vest Equity and MKAM ETF, you can compare the effects of market volatilities on FT Vest and MKAM ETF 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 FT Vest with a short position of MKAM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Vest and MKAM ETF.
Diversification Opportunities for FT Vest and MKAM ETF
Very good diversification
The 3 months correlation between DHDG and MKAM is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding FT Vest Equity and MKAM ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MKAM ETF and FT Vest 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 FT Vest Equity are associated (or correlated) with MKAM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MKAM ETF has no effect on the direction of FT Vest i.e., FT Vest and MKAM ETF go up and down completely randomly.
Pair Corralation between FT Vest and MKAM ETF
Given the investment horizon of 90 days FT Vest Equity is expected to generate 1.0 times more return on investment than MKAM ETF. However, FT Vest is 1.0 times more volatile than MKAM ETF. It trades about 0.4 of its potential returns per unit of risk. MKAM ETF is currently generating about 0.36 per unit of risk. If you would invest 3,005 in FT Vest Equity on September 1, 2024 and sell it today you would earn a total of 98.00 from holding FT Vest Equity or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
FT Vest Equity vs. MKAM ETF
Performance |
| Timeline |
| FT Vest Equity |
| MKAM ETF |
FT Vest and MKAM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FT Vest and MKAM ETF
The main advantage of trading using opposite FT Vest and MKAM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FT Vest position performs unexpectedly, MKAM ETF 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 MKAM ETF will offset losses from the drop in MKAM ETF's long position.| FT Vest vs. Vanguard Total Stock | FT Vest vs. SPDR SP 500 | FT Vest vs. iShares Core SP | FT Vest vs. Vanguard Total Bond |
| MKAM ETF vs. FT Vest Equity | MKAM ETF vs. Northern Lights | MKAM ETF vs. Dimensional International High | MKAM ETF vs. Matthews China Discovery |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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