Correlation Between ETFS ROBO and ETFS FANG
Can any of the company-specific risk be diversified away by investing in both ETFS ROBO and ETFS FANG 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 ETFS ROBO and ETFS FANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFS ROBO Global and ETFS FANG ETF, you can compare the effects of market volatilities on ETFS ROBO and ETFS FANG 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 ETFS ROBO with a short position of ETFS FANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS ROBO and ETFS FANG.
Diversification Opportunities for ETFS ROBO and ETFS FANG
Almost no diversification
The 3 months correlation between ETFS and ETFS is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding ETFS ROBO Global and ETFS FANG ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS FANG ETF and ETFS ROBO 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 ETFS ROBO Global are associated (or correlated) with ETFS FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS FANG ETF has no effect on the direction of ETFS ROBO i.e., ETFS ROBO and ETFS FANG go up and down completely randomly.
Pair Corralation between ETFS ROBO and ETFS FANG
Assuming the 90 days trading horizon ETFS ROBO is expected to generate 5.93 times less return on investment than ETFS FANG. But when comparing it to its historical volatility, ETFS ROBO Global is 1.54 times less risky than ETFS FANG. It trades about 0.03 of its potential returns per unit of risk. ETFS FANG ETF is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,282 in ETFS FANG ETF on September 1, 2024 and sell it today you would earn a total of 1,658 from holding ETFS FANG ETF or generate 129.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.78% |
| Values | Daily Returns |
ETFS ROBO Global vs. ETFS FANG ETF
Performance |
| Timeline |
| ETFS ROBO Global |
| ETFS FANG ETF |
ETFS ROBO and ETFS FANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS ROBO and ETFS FANG
The main advantage of trading using opposite ETFS ROBO and ETFS FANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS ROBO position performs unexpectedly, ETFS FANG 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 ETFS FANG will offset losses from the drop in ETFS FANG's long position.| ETFS ROBO vs. ETFS Battery Tech | ETFS ROBO vs. ETFS Ultra Long | ETFS ROBO vs. ETFS Ultra Short | ETFS ROBO vs. ETFS FANG ETF |
| ETFS FANG vs. Champion Iron | ETFS FANG vs. Australian Dairy Farms | ETFS FANG vs. Perpetual Credit Income | ETFS FANG vs. Greentech Metals |
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 Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |