Correlation Between Arrow DWA and Aptus Defined
Can any of the company-specific risk be diversified away by investing in both Arrow DWA and Aptus Defined 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 Arrow DWA and Aptus Defined into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow DWA Tactical and Aptus Defined Risk, you can compare the effects of market volatilities on Arrow DWA and Aptus Defined 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 Arrow DWA with a short position of Aptus Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow DWA and Aptus Defined.
Diversification Opportunities for Arrow DWA and Aptus Defined
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arrow and Aptus is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Arrow DWA Tactical and Aptus Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptus Defined Risk and Arrow DWA 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 Arrow DWA Tactical are associated (or correlated) with Aptus Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptus Defined Risk has no effect on the direction of Arrow DWA i.e., Arrow DWA and Aptus Defined go up and down completely randomly.
Pair Corralation between Arrow DWA and Aptus Defined
Given the investment horizon of 90 days Arrow DWA Tactical is expected to generate 1.66 times more return on investment than Aptus Defined. However, Arrow DWA is 1.66 times more volatile than Aptus Defined Risk. It trades about 0.15 of its potential returns per unit of risk. Aptus Defined Risk is currently generating about -0.02 per unit of risk. If you would invest 1,176 in Arrow DWA Tactical on October 25, 2024 and sell it today you would earn a total of 28.90 from holding Arrow DWA Tactical or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow DWA Tactical vs. Aptus Defined Risk
Performance |
| Timeline |
| Arrow DWA Tactical |
| Aptus Defined Risk |
Arrow DWA and Aptus Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow DWA and Aptus Defined
The main advantage of trading using opposite Arrow DWA and Aptus Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow DWA position performs unexpectedly, Aptus Defined 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 Aptus Defined will offset losses from the drop in Aptus Defined's long position.| Arrow DWA vs. Arrow DWA Tactical | Arrow DWA vs. FlexShares Real Assets | Arrow DWA vs. First Trust Income | Arrow DWA vs. VictoryShares Discovery Enhanced |
| Aptus Defined vs. Amplify BlackSwan Growth | Aptus Defined vs. Aptus Collared Income | Aptus Defined vs. Aptus Drawdown Managed | Aptus Defined vs. Cambria Tail Risk |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |