Correlation Between Swan Hedged and Manager Directed
Can any of the company-specific risk be diversified away by investing in both Swan Hedged and Manager Directed 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 Manager Directed 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 Manager Directed Portfolios, you can compare the effects of market volatilities on Swan Hedged and Manager Directed 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 Manager Directed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swan Hedged and Manager Directed.
Diversification Opportunities for Swan Hedged and Manager Directed
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Swan and Manager is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Swan Hedged Equity and Manager Directed Portfolios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manager Directed Por 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 Manager Directed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manager Directed Por has no effect on the direction of Swan Hedged i.e., Swan Hedged and Manager Directed go up and down completely randomly.
Pair Corralation between Swan Hedged and Manager Directed
Given the investment horizon of 90 days Swan Hedged Equity is expected to generate 14.32 times more return on investment than Manager Directed. However, Swan Hedged is 14.32 times more volatile than Manager Directed Portfolios. It trades about 0.1 of its potential returns per unit of risk. Manager Directed Portfolios is currently generating about 0.4 per unit of risk. If you would invest 1,753 in Swan Hedged Equity on September 4, 2024 and sell it today you would earn a total of 542.00 from holding Swan Hedged Equity or generate 30.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 14.95% |
| Values | Daily Returns |
Swan Hedged Equity vs. Manager Directed Portfolios
Performance |
| Timeline |
| Swan Hedged Equity |
| Manager Directed Por |
Swan Hedged and Manager Directed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swan Hedged and Manager Directed
The main advantage of trading using opposite Swan Hedged and Manager Directed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swan Hedged position performs unexpectedly, Manager Directed 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 Manager Directed will offset losses from the drop in Manager Directed's long position.| Swan Hedged vs. Core Alternative ETF | Swan Hedged vs. Aptus Drawdown Managed | Swan Hedged vs. Cambria Value and | Swan Hedged vs. WisdomTree Target Range |
| Manager Directed vs. Core Alternative ETF | Manager Directed vs. Aptus Drawdown Managed | Manager Directed vs. Swan Hedged Equity | Manager Directed vs. Cambria Value and |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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