Correlation Between MicroSectors FANG and Elevation Series
Can any of the company-specific risk be diversified away by investing in both MicroSectors FANG and Elevation 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 MicroSectors FANG and Elevation Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MicroSectors FANG Index and Elevation Series Trust, you can compare the effects of market volatilities on MicroSectors FANG and Elevation 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 MicroSectors FANG with a short position of Elevation Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroSectors FANG and Elevation Series.
Diversification Opportunities for MicroSectors FANG and Elevation Series
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MicroSectors and Elevation is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding MicroSectors FANG Index and Elevation Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevation Series Trust and MicroSectors FANG 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 MicroSectors FANG Index are associated (or correlated) with Elevation Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevation Series Trust has no effect on the direction of MicroSectors FANG i.e., MicroSectors FANG and Elevation Series go up and down completely randomly.
Pair Corralation between MicroSectors FANG and Elevation Series
Given the investment horizon of 90 days MicroSectors FANG Index is expected to generate 5.98 times more return on investment than Elevation Series. However, MicroSectors FANG is 5.98 times more volatile than Elevation Series Trust. It trades about 0.08 of its potential returns per unit of risk. Elevation Series Trust is currently generating about 0.12 per unit of risk. If you would invest 35,348 in MicroSectors FANG Index on September 2, 2024 and sell it today you would earn a total of 15,452 from holding MicroSectors FANG Index or generate 43.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MicroSectors FANG Index vs. Elevation Series Trust
Performance |
| Timeline |
| MicroSectors FANG Index |
| Elevation Series Trust |
MicroSectors FANG and Elevation Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MicroSectors FANG and Elevation Series
The main advantage of trading using opposite MicroSectors FANG and Elevation Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroSectors FANG position performs unexpectedly, Elevation 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 Elevation Series will offset losses from the drop in Elevation Series' long position.| MicroSectors FANG vs. Direxion Daily Semiconductor | MicroSectors FANG vs. MicroSectors Solactive FANG | MicroSectors FANG vs. MicroSectors FANG Index | MicroSectors FANG vs. Direxion Daily Technology |
| Elevation Series vs. Aquagold International | Elevation Series vs. Thrivent High Yield | Elevation Series vs. Morningstar Unconstrained Allocation | Elevation Series vs. High Yield Municipal Fund |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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