Correlation Between ETF Series and Ballast SmallMid

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Can any of the company-specific risk be diversified away by investing in both ETF Series and Ballast SmallMid 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 ETF Series and Ballast SmallMid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETF Series Solutions and Ballast SmallMid Cap, you can compare the effects of market volatilities on ETF Series and Ballast SmallMid 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 ETF Series with a short position of Ballast SmallMid. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETF Series and Ballast SmallMid.

Diversification Opportunities for ETF Series and Ballast SmallMid

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between ETF and Ballast is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding ETF Series Solutions and Ballast SmallMid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballast SmallMid Cap and ETF Series 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 ETF Series Solutions are associated (or correlated) with Ballast SmallMid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballast SmallMid Cap has no effect on the direction of ETF Series i.e., ETF Series and Ballast SmallMid go up and down completely randomly.

Pair Corralation between ETF Series and Ballast SmallMid

Given the investment horizon of 90 days ETF Series Solutions is expected to generate 0.8 times more return on investment than Ballast SmallMid. However, ETF Series Solutions is 1.25 times less risky than Ballast SmallMid. It trades about 0.36 of its potential returns per unit of risk. Ballast SmallMid Cap is currently generating about 0.06 per unit of risk. If you would invest  2,318  in ETF Series Solutions on November 4, 2024 and sell it today you would earn a total of  136.00  from holding ETF Series Solutions or generate 5.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

ETF Series Solutions  vs.  Ballast SmallMid Cap

 Performance 
       Timeline  
ETF Series Solutions 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in ETF Series Solutions are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, ETF Series is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Ballast SmallMid Cap 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Ballast SmallMid Cap are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting primary indicators, Ballast SmallMid may actually be approaching a critical reversion point that can send shares even higher in March 2025.

ETF Series and Ballast SmallMid Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ETF Series and Ballast SmallMid

The main advantage of trading using opposite ETF Series and Ballast SmallMid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETF Series position performs unexpectedly, Ballast SmallMid 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 Ballast SmallMid will offset losses from the drop in Ballast SmallMid's long position.
The idea behind ETF Series Solutions and Ballast SmallMid Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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