Correlation Between ClearShares OCIO and MKAM ETF
Can any of the company-specific risk be diversified away by investing in both ClearShares OCIO and MKAM 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 ClearShares OCIO and MKAM ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ClearShares OCIO ETF and MKAM ETF, you can compare the effects of market volatilities on ClearShares OCIO and MKAM 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 ClearShares OCIO with a short position of MKAM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ClearShares OCIO and MKAM ETF.
Diversification Opportunities for ClearShares OCIO and MKAM ETF
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ClearShares and MKAM is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding ClearShares OCIO ETF and MKAM ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MKAM ETF and ClearShares OCIO 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 ClearShares OCIO ETF are associated (or correlated) with MKAM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MKAM ETF has no effect on the direction of ClearShares OCIO i.e., ClearShares OCIO and MKAM ETF go up and down completely randomly.
Pair Corralation between ClearShares OCIO and MKAM ETF
Given the investment horizon of 90 days ClearShares OCIO ETF is expected to generate 1.46 times more return on investment than MKAM ETF. However, ClearShares OCIO is 1.46 times more volatile than MKAM ETF. It trades about 0.06 of its potential returns per unit of risk. MKAM ETF is currently generating about 0.04 per unit of risk. If you would invest 3,423 in ClearShares OCIO ETF on October 23, 2024 and sell it today you would earn a total of 22.00 from holding ClearShares OCIO ETF or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ClearShares OCIO ETF vs. MKAM ETF
Performance |
| Timeline |
| ClearShares OCIO ETF |
| MKAM ETF |
ClearShares OCIO and MKAM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ClearShares OCIO and MKAM ETF
The main advantage of trading using opposite ClearShares OCIO and MKAM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ClearShares OCIO position performs unexpectedly, MKAM 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 MKAM ETF will offset losses from the drop in MKAM ETF's long position.| ClearShares OCIO vs. ClearShares Ultra Short Maturity | ClearShares OCIO vs. Opus Small Cap | ClearShares OCIO vs. SPDR SSgA Income |
| MKAM ETF vs. FT Vest Equity | MKAM ETF vs. Northern Lights | MKAM ETF vs. Dimensional International High | MKAM ETF vs. JPMorgan Fundamental Data |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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