Correlation Between AdvisorShares and ETC 6
Can any of the company-specific risk be diversified away by investing in both AdvisorShares and ETC 6 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 AdvisorShares and ETC 6 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AdvisorShares and ETC 6 Meridian, you can compare the effects of market volatilities on AdvisorShares and ETC 6 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 AdvisorShares with a short position of ETC 6. Check out your portfolio center. Please also check ongoing floating volatility patterns of AdvisorShares and ETC 6.
Diversification Opportunities for AdvisorShares and ETC 6
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AdvisorShares and ETC is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding AdvisorShares and ETC 6 Meridian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETC 6 Meridian and AdvisorShares 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 AdvisorShares are associated (or correlated) with ETC 6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETC 6 Meridian has no effect on the direction of AdvisorShares i.e., AdvisorShares and ETC 6 go up and down completely randomly.
Pair Corralation between AdvisorShares and ETC 6
If you would invest 3,730 in ETC 6 Meridian on August 30, 2024 and sell it today you would earn a total of 77.00 from holding ETC 6 Meridian or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.35% |
| Values | Daily Returns |
AdvisorShares vs. ETC 6 Meridian
Performance |
| Timeline |
| AdvisorShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ETC 6 Meridian |
AdvisorShares and ETC 6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AdvisorShares and ETC 6
The main advantage of trading using opposite AdvisorShares and ETC 6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AdvisorShares position performs unexpectedly, ETC 6 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 ETC 6 will offset losses from the drop in ETC 6's long position.| AdvisorShares vs. AdvisorShares Q Dynamic | AdvisorShares vs. Direxion Daily Dow | AdvisorShares vs. Main Thematic Innovation | AdvisorShares vs. AdvisorShares Vice ETF |
| ETC 6 vs. 6 Meridian Mega | ETC 6 vs. 6 Meridian Low | ETC 6 vs. 6 Meridian Small | ETC 6 vs. Overlay Shares Large |
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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