Correlation Between KFA Mount and FolioBeyond Rising
Can any of the company-specific risk be diversified away by investing in both KFA Mount and FolioBeyond Rising 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 KFA Mount and FolioBeyond Rising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KFA Mount Lucas and FolioBeyond Rising Rates, you can compare the effects of market volatilities on KFA Mount and FolioBeyond Rising 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 KFA Mount with a short position of FolioBeyond Rising. Check out your portfolio center. Please also check ongoing floating volatility patterns of KFA Mount and FolioBeyond Rising.
Diversification Opportunities for KFA Mount and FolioBeyond Rising
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KFA and FolioBeyond is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding KFA Mount Lucas and FolioBeyond Rising Rates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FolioBeyond Rising Rates and KFA Mount 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 KFA Mount Lucas are associated (or correlated) with FolioBeyond Rising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FolioBeyond Rising Rates has no effect on the direction of KFA Mount i.e., KFA Mount and FolioBeyond Rising go up and down completely randomly.
Pair Corralation between KFA Mount and FolioBeyond Rising
Given the investment horizon of 90 days KFA Mount Lucas is expected to under-perform the FolioBeyond Rising. In addition to that, KFA Mount is 1.56 times more volatile than FolioBeyond Rising Rates. It trades about -0.19 of its total potential returns per unit of risk. FolioBeyond Rising Rates is currently generating about 0.04 per unit of volatility. If you would invest 3,529 in FolioBeyond Rising Rates on September 1, 2024 and sell it today you would earn a total of 10.00 from holding FolioBeyond Rising Rates or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KFA Mount Lucas vs. FolioBeyond Rising Rates
Performance |
| Timeline |
| KFA Mount Lucas |
| FolioBeyond Rising Rates |
KFA Mount and FolioBeyond Rising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KFA Mount and FolioBeyond Rising
The main advantage of trading using opposite KFA Mount and FolioBeyond Rising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KFA Mount position performs unexpectedly, FolioBeyond Rising 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 FolioBeyond Rising will offset losses from the drop in FolioBeyond Rising's long position.| KFA Mount vs. First Trust LongShort | KFA Mount vs. First Trust Alternative | KFA Mount vs. iMGP DBi Managed | KFA Mount vs. First Trust Japan |
| FolioBeyond Rising vs. Simplify Interest Rate | FolioBeyond Rising vs. KFA Mount Lucas | FolioBeyond Rising vs. Horizon Kinetics Inflation | FolioBeyond Rising vs. iMGP DBi Managed |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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