Correlation Between FundX Aggressive and Freedom Day
Can any of the company-specific risk be diversified away by investing in both FundX Aggressive and Freedom Day 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 FundX Aggressive and Freedom Day into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FundX Aggressive ETF and Freedom Day Dividend, you can compare the effects of market volatilities on FundX Aggressive and Freedom Day 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 FundX Aggressive with a short position of Freedom Day. Check out your portfolio center. Please also check ongoing floating volatility patterns of FundX Aggressive and Freedom Day.
Diversification Opportunities for FundX Aggressive and Freedom Day
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FundX and Freedom is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding FundX Aggressive ETF and Freedom Day Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Day Dividend and FundX Aggressive 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 FundX Aggressive ETF are associated (or correlated) with Freedom Day. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Day Dividend has no effect on the direction of FundX Aggressive i.e., FundX Aggressive and Freedom Day go up and down completely randomly.
Pair Corralation between FundX Aggressive and Freedom Day
Given the investment horizon of 90 days FundX Aggressive ETF is expected to generate 1.44 times more return on investment than Freedom Day. However, FundX Aggressive is 1.44 times more volatile than Freedom Day Dividend. It trades about 0.1 of its potential returns per unit of risk. Freedom Day Dividend is currently generating about 0.11 per unit of risk. If you would invest 5,234 in FundX Aggressive ETF on September 12, 2024 and sell it today you would earn a total of 2,113 from holding FundX Aggressive ETF or generate 40.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FundX Aggressive ETF vs. Freedom Day Dividend
Performance |
| Timeline |
| FundX Aggressive ETF |
| Freedom Day Dividend |
FundX Aggressive and Freedom Day Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FundX Aggressive and Freedom Day
The main advantage of trading using opposite FundX Aggressive and Freedom Day positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FundX Aggressive position performs unexpectedly, Freedom Day 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 Freedom Day will offset losses from the drop in Freedom Day's long position.| FundX Aggressive vs. Freedom Day Dividend | FundX Aggressive vs. Franklin Templeton ETF | FundX Aggressive vs. iShares MSCI China | FundX Aggressive vs. Tidal Trust II |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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