Correlation Between FT Vest and ETF Series
Can any of the company-specific risk be diversified away by investing in both FT Vest 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 FT Vest and ETF Series 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 ETF Series Solutions, you can compare the effects of market volatilities on FT Vest 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 FT Vest with a short position of ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Vest and ETF Series.
Diversification Opportunities for FT Vest and ETF Series
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DHDG and ETF is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding FT Vest Equity 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 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 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 FT Vest i.e., FT Vest and ETF Series go up and down completely randomly.
Pair Corralation between FT Vest and ETF Series
Given the investment horizon of 90 days FT Vest Equity is expected to generate 0.46 times more return on investment than ETF Series. However, FT Vest Equity is 2.16 times less risky than ETF Series. It trades about 0.4 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.17 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. ETF Series Solutions
Performance |
| Timeline |
| FT Vest Equity |
| ETF Series Solutions |
FT Vest and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FT Vest and ETF Series
The main advantage of trading using opposite FT Vest and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FT Vest 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.| FT Vest vs. Vanguard Total Stock | FT Vest vs. SPDR SP 500 | FT Vest vs. iShares Core SP | FT Vest vs. Vanguard Total Bond |
| ETF Series vs. FT Vest Equity | ETF Series vs. Northern Lights | ETF Series vs. Dimensional International High | ETF Series 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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