Correlation Between Listed Funds and SWP Growth
Can any of the company-specific risk be diversified away by investing in both Listed Funds and SWP Growth 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 Listed Funds and SWP Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Listed Funds Trust and SWP Growth Income, you can compare the effects of market volatilities on Listed Funds and SWP Growth 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 Listed Funds with a short position of SWP Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Listed Funds and SWP Growth.
Diversification Opportunities for Listed Funds and SWP Growth
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Listed and SWP is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Listed Funds Trust and SWP Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWP Growth Income and Listed Funds 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 Listed Funds Trust are associated (or correlated) with SWP Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWP Growth Income has no effect on the direction of Listed Funds i.e., Listed Funds and SWP Growth go up and down completely randomly.
Pair Corralation between Listed Funds and SWP Growth
Given the investment horizon of 90 days Listed Funds is expected to generate 1.63 times less return on investment than SWP Growth. But when comparing it to its historical volatility, Listed Funds Trust is 1.08 times less risky than SWP Growth. It trades about 0.06 of its potential returns per unit of risk. SWP Growth Income is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,486 in SWP Growth Income on November 2, 2024 and sell it today you would earn a total of 144.00 from holding SWP Growth Income or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 17.81% |
| Values | Daily Returns |
Listed Funds Trust vs. SWP Growth Income
Performance |
| Timeline |
| Listed Funds Trust |
| SWP Growth Income |
Listed Funds and SWP Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Listed Funds and SWP Growth
The main advantage of trading using opposite Listed Funds and SWP Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Listed Funds position performs unexpectedly, SWP Growth 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 SWP Growth will offset losses from the drop in SWP Growth's long position.| Listed Funds vs. Pacer Global Cash | Listed Funds vs. SmartETFs Dividend Builder | Listed Funds vs. FT Cboe Vest | Listed Funds vs. Franklin International Low |
| SWP Growth vs. Freedom Day Dividend | SWP Growth vs. iShares MSCI China | SWP Growth vs. SmartETFs Dividend Builder | SWP Growth vs. Listed Funds 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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