Correlation Between Main Thematic and Formidable ETF
Can any of the company-specific risk be diversified away by investing in both Main Thematic and Formidable 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 Main Thematic and Formidable ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main Thematic Innovation and Formidable ETF, you can compare the effects of market volatilities on Main Thematic and Formidable 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 Main Thematic with a short position of Formidable ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main Thematic and Formidable ETF.
Diversification Opportunities for Main Thematic and Formidable ETF
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Main and Formidable is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Main Thematic Innovation and Formidable ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formidable ETF and Main Thematic 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 Main Thematic Innovation are associated (or correlated) with Formidable ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formidable ETF has no effect on the direction of Main Thematic i.e., Main Thematic and Formidable ETF go up and down completely randomly.
Pair Corralation between Main Thematic and Formidable ETF
Given the investment horizon of 90 days Main Thematic Innovation is expected to generate 2.42 times more return on investment than Formidable ETF. However, Main Thematic is 2.42 times more volatile than Formidable ETF. It trades about 0.17 of its potential returns per unit of risk. Formidable ETF is currently generating about -0.04 per unit of risk. If you would invest 1,630 in Main Thematic Innovation on November 2, 2024 and sell it today you would earn a total of 553.00 from holding Main Thematic Innovation or generate 33.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Main Thematic Innovation vs. Formidable ETF
Performance |
| Timeline |
| Main Thematic Innovation |
| Formidable ETF |
Main Thematic and Formidable ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main Thematic and Formidable ETF
The main advantage of trading using opposite Main Thematic and Formidable ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main Thematic position performs unexpectedly, Formidable 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 Formidable ETF will offset losses from the drop in Formidable ETF's long position.| Main Thematic vs. Main Sector Rotation | Main Thematic vs. Global X Thematic | Main Thematic vs. Franklin Exponential Data | Main Thematic vs. Goldman Sachs Innovate |
| Formidable ETF vs. Franklin Liberty Systematic | Formidable ETF vs. Alger Mid Cap | Formidable ETF vs. Tidal ETF Trust | Formidable ETF vs. First Trust 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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