Correlation Between Swan Hedged and Aptus Drawdown
Can any of the company-specific risk be diversified away by investing in both Swan Hedged and Aptus Drawdown 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 Swan Hedged and Aptus Drawdown into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swan Hedged Equity and Aptus Drawdown Managed, you can compare the effects of market volatilities on Swan Hedged and Aptus Drawdown 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 Swan Hedged with a short position of Aptus Drawdown. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swan Hedged and Aptus Drawdown.
Diversification Opportunities for Swan Hedged and Aptus Drawdown
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Swan and Aptus is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Swan Hedged Equity and Aptus Drawdown Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptus Drawdown Managed and Swan Hedged 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 Swan Hedged Equity are associated (or correlated) with Aptus Drawdown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptus Drawdown Managed has no effect on the direction of Swan Hedged i.e., Swan Hedged and Aptus Drawdown go up and down completely randomly.
Pair Corralation between Swan Hedged and Aptus Drawdown
Given the investment horizon of 90 days Swan Hedged Equity is expected to generate 0.77 times more return on investment than Aptus Drawdown. However, Swan Hedged Equity is 1.3 times less risky than Aptus Drawdown. It trades about 0.1 of its potential returns per unit of risk. Aptus Drawdown Managed is currently generating about 0.07 per unit of risk. If you would invest 2,245 in Swan Hedged Equity on August 23, 2024 and sell it today you would earn a total of 28.00 from holding Swan Hedged Equity or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swan Hedged Equity vs. Aptus Drawdown Managed
Performance |
| Timeline |
| Swan Hedged Equity |
| Aptus Drawdown Managed |
Swan Hedged and Aptus Drawdown Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swan Hedged and Aptus Drawdown
The main advantage of trading using opposite Swan Hedged and Aptus Drawdown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swan Hedged position performs unexpectedly, Aptus Drawdown 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 Drawdown will offset losses from the drop in Aptus Drawdown's long position.| Swan Hedged vs. Aptus Collared Income | Swan Hedged vs. Core Alternative ETF | Swan Hedged vs. Aptus Drawdown Managed | Swan Hedged vs. Amplify BlackSwan Growth |
| Aptus Drawdown vs. Aptus Collared Income | Aptus Drawdown vs. Aptus Defined Risk | Aptus Drawdown vs. Anfield Equity Sector | Aptus Drawdown vs. Opus Small Cap |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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