Correlation Between Alpha Architect and Exchange Traded
Can any of the company-specific risk be diversified away by investing in both Alpha Architect and Exchange Traded 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 Alpha Architect and Exchange Traded into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Architect Value and Exchange Traded Concepts, you can compare the effects of market volatilities on Alpha Architect and Exchange Traded 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 Alpha Architect with a short position of Exchange Traded. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Architect and Exchange Traded.
Diversification Opportunities for Alpha Architect and Exchange Traded
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alpha and Exchange is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Architect Value and Exchange Traded Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Traded Concepts and Alpha Architect 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 Alpha Architect Value are associated (or correlated) with Exchange Traded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Traded Concepts has no effect on the direction of Alpha Architect i.e., Alpha Architect and Exchange Traded go up and down completely randomly.
Pair Corralation between Alpha Architect and Exchange Traded
Given the investment horizon of 90 days Alpha Architect Value is expected to generate 2.64 times more return on investment than Exchange Traded. However, Alpha Architect is 2.64 times more volatile than Exchange Traded Concepts. It trades about 0.04 of its potential returns per unit of risk. Exchange Traded Concepts is currently generating about -0.02 per unit of risk. If you would invest 2,307 in Alpha Architect Value on August 30, 2024 and sell it today you would earn a total of 433.00 from holding Alpha Architect Value or generate 18.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.31% |
| Values | Daily Returns |
Alpha Architect Value vs. Exchange Traded Concepts
Performance |
| Timeline |
| Alpha Architect Value |
| Exchange Traded Concepts |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alpha Architect and Exchange Traded Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Architect and Exchange Traded
The main advantage of trading using opposite Alpha Architect and Exchange Traded positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Architect position performs unexpectedly, Exchange Traded 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 Exchange Traded will offset losses from the drop in Exchange Traded's long position.| Alpha Architect vs. Alpha Architect Quantitative | Alpha Architect vs. Alpha Architect International | Alpha Architect vs. Alpha Architect International | Alpha Architect vs. Alpha Architect Quantitative |
| Exchange Traded vs. Cambria Trinity ETF | Exchange Traded vs. Northern Lights | Exchange Traded vs. Cambria Global Momentum | Exchange Traded vs. Alpha Architect Value |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |