Correlation Between International Drawdown and NEOS ETF
Can any of the company-specific risk be diversified away by investing in both International Drawdown and NEOS ETF 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 International Drawdown and NEOS ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Drawdown Managed and NEOS ETF Trust, you can compare the effects of market volatilities on International Drawdown and NEOS ETF 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 International Drawdown with a short position of NEOS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Drawdown and NEOS ETF.
Diversification Opportunities for International Drawdown and NEOS ETF
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between International and NEOS is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding International Drawdown Managed and NEOS ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEOS ETF Trust and International Drawdown 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 International Drawdown Managed are associated (or correlated) with NEOS ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEOS ETF Trust has no effect on the direction of International Drawdown i.e., International Drawdown and NEOS ETF go up and down completely randomly.
Pair Corralation between International Drawdown and NEOS ETF
Given the investment horizon of 90 days International Drawdown Managed is expected to under-perform the NEOS ETF. But the etf apears to be less risky and, when comparing its historical volatility, International Drawdown Managed is 1.02 times less risky than NEOS ETF. The etf trades about -0.17 of its potential returns per unit of risk. The NEOS ETF Trust is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,519 in NEOS ETF Trust on August 30, 2024 and sell it today you would earn a total of 70.00 from holding NEOS ETF Trust or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
International Drawdown Managed vs. NEOS ETF Trust
Performance |
| Timeline |
| International Drawdown |
| NEOS ETF Trust |
International Drawdown and NEOS ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Drawdown and NEOS ETF
The main advantage of trading using opposite International Drawdown and NEOS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Drawdown position performs unexpectedly, NEOS ETF 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 NEOS ETF will offset losses from the drop in NEOS ETF's long position.| International Drawdown vs. Global X SP | International Drawdown vs. Amplify CWP Enhanced | International Drawdown vs. Global X Russell | International Drawdown vs. JPMorgan Nasdaq Equity |
| NEOS ETF vs. Global X Russell | NEOS ETF vs. Global X SP | NEOS ETF vs. Global X NASDAQ | NEOS ETF vs. Amplify CWP Enhanced |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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