Correlation Between FT AlphaDEX and IShares SPTSX
Can any of the company-specific risk be diversified away by investing in both FT AlphaDEX and IShares SPTSX 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 AlphaDEX and IShares SPTSX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FT AlphaDEX Industrials and iShares SPTSX Capped, you can compare the effects of market volatilities on FT AlphaDEX and IShares SPTSX 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 AlphaDEX with a short position of IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT AlphaDEX and IShares SPTSX.
Diversification Opportunities for FT AlphaDEX and IShares SPTSX
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FHG and IShares is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding FT AlphaDEX Industrials and iShares SPTSX Capped in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX Capped and FT AlphaDEX 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 AlphaDEX Industrials are associated (or correlated) with IShares SPTSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SPTSX Capped has no effect on the direction of FT AlphaDEX i.e., FT AlphaDEX and IShares SPTSX go up and down completely randomly.
Pair Corralation between FT AlphaDEX and IShares SPTSX
Assuming the 90 days trading horizon FT AlphaDEX Industrials is expected to generate 0.71 times more return on investment than IShares SPTSX. However, FT AlphaDEX Industrials is 1.42 times less risky than IShares SPTSX. It trades about 0.2 of its potential returns per unit of risk. iShares SPTSX Capped is currently generating about 0.06 per unit of risk. If you would invest 5,718 in FT AlphaDEX Industrials on October 20, 2024 and sell it today you would earn a total of 232.00 from holding FT AlphaDEX Industrials or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FT AlphaDEX Industrials vs. iShares SPTSX Capped
Performance |
| Timeline |
| FT AlphaDEX Industrials |
| iShares SPTSX Capped |
FT AlphaDEX and IShares SPTSX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FT AlphaDEX and IShares SPTSX
The main advantage of trading using opposite FT AlphaDEX and IShares SPTSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FT AlphaDEX position performs unexpectedly, IShares SPTSX 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 IShares SPTSX will offset losses from the drop in IShares SPTSX's long position.| FT AlphaDEX vs. BMO Covered Call | FT AlphaDEX vs. BMO Equal Weight | FT AlphaDEX vs. iShares SPTSX Capped | FT AlphaDEX vs. BMO Equal Weight |
| IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Global |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |