Correlation Between NEOS ETF and Main Buywrite
Can any of the company-specific risk be diversified away by investing in both NEOS ETF and Main Buywrite 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 NEOS ETF and Main Buywrite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEOS ETF Trust and Main Buywrite ETF, you can compare the effects of market volatilities on NEOS ETF and Main Buywrite 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 NEOS ETF with a short position of Main Buywrite. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEOS ETF and Main Buywrite.
Diversification Opportunities for NEOS ETF and Main Buywrite
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NEOS and Main is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding NEOS ETF Trust and Main Buywrite ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Main Buywrite ETF and NEOS ETF 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 NEOS ETF Trust are associated (or correlated) with Main Buywrite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Main Buywrite ETF has no effect on the direction of NEOS ETF i.e., NEOS ETF and Main Buywrite go up and down completely randomly.
Pair Corralation between NEOS ETF and Main Buywrite
Given the investment horizon of 90 days NEOS ETF Trust is expected to generate 2.21 times more return on investment than Main Buywrite. However, NEOS ETF is 2.21 times more volatile than Main Buywrite ETF. It trades about 0.14 of its potential returns per unit of risk. Main Buywrite ETF is currently generating about 0.11 per unit of risk. If you would invest 1,622 in NEOS ETF Trust on November 28, 2024 and sell it today you would earn a total of 1,056 from holding NEOS ETF Trust or generate 65.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.39% |
| Values | Daily Returns |
NEOS ETF Trust vs. Main Buywrite ETF
Performance |
| Timeline |
| NEOS ETF Trust |
| Main Buywrite ETF |
NEOS ETF and Main Buywrite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEOS ETF and Main Buywrite
The main advantage of trading using opposite NEOS ETF and Main Buywrite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEOS ETF position performs unexpectedly, Main Buywrite 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 Main Buywrite will offset losses from the drop in Main Buywrite's long position.| NEOS ETF vs. Global X Russell | NEOS ETF vs. Global X SP | NEOS ETF vs. Global X NASDAQ | NEOS ETF vs. Amplify CWP Enhanced |
| Main Buywrite vs. Main Sector Rotation | Main Buywrite vs. iShares Trust | Main Buywrite vs. Janus Detroit Street | Main Buywrite vs. Bondbloxx ETF Trust |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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