Correlation Between STF Tactical and Advocate Capital
Can any of the company-specific risk be diversified away by investing in both STF Tactical and Advocate Capital 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 STF Tactical and Advocate Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STF Tactical Growth and Advocate Capital Management, you can compare the effects of market volatilities on STF Tactical and Advocate Capital 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 STF Tactical with a short position of Advocate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of STF Tactical and Advocate Capital.
Diversification Opportunities for STF Tactical and Advocate Capital
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STF and Advocate is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding STF Tactical Growth and Advocate Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advocate Capital Man and STF Tactical 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 STF Tactical Growth are associated (or correlated) with Advocate Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advocate Capital Man has no effect on the direction of STF Tactical i.e., STF Tactical and Advocate Capital go up and down completely randomly.
Pair Corralation between STF Tactical and Advocate Capital
If you would invest 3,244 in STF Tactical Growth on August 30, 2024 and sell it today you would earn a total of 216.00 from holding STF Tactical Growth or generate 6.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.79% |
| Values | Daily Returns |
STF Tactical Growth vs. Advocate Capital Management
Performance |
| Timeline |
| STF Tactical Growth |
| Advocate Capital Man |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
STF Tactical and Advocate Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STF Tactical and Advocate Capital
The main advantage of trading using opposite STF Tactical and Advocate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STF Tactical position performs unexpectedly, Advocate Capital 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 Advocate Capital will offset losses from the drop in Advocate Capital's long position.The idea behind STF Tactical Growth and Advocate Capital Management pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Advocate Capital vs. Alpha Architect Gdsdn | Advocate Capital vs. VanEck Inflation Allocation | Advocate Capital vs. ClearShares OCIO ETF | Advocate Capital vs. Northern Lights |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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