Correlation Between ETFS Enhanced and ETFS FANG
Can any of the company-specific risk be diversified away by investing in both ETFS Enhanced and ETFS FANG 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 ETFS Enhanced and ETFS FANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFS Enhanced USD and ETFS FANG ETF, you can compare the effects of market volatilities on ETFS Enhanced and ETFS FANG 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 ETFS Enhanced with a short position of ETFS FANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Enhanced and ETFS FANG.
Diversification Opportunities for ETFS Enhanced and ETFS FANG
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ETFS and ETFS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Enhanced USD and ETFS FANG ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS FANG ETF and ETFS Enhanced 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 ETFS Enhanced USD are associated (or correlated) with ETFS FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS FANG ETF has no effect on the direction of ETFS Enhanced i.e., ETFS Enhanced and ETFS FANG go up and down completely randomly.
Pair Corralation between ETFS Enhanced and ETFS FANG
If you would invest 1,282 in ETFS FANG ETF on September 1, 2024 and sell it today you would earn a total of 1,658 from holding ETFS FANG ETF or generate 129.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
ETFS Enhanced USD vs. ETFS FANG ETF
Performance |
| Timeline |
| ETFS Enhanced USD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ETFS FANG ETF |
ETFS Enhanced and ETFS FANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Enhanced and ETFS FANG
The main advantage of trading using opposite ETFS Enhanced and ETFS FANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Enhanced position performs unexpectedly, ETFS FANG 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 ETFS FANG will offset losses from the drop in ETFS FANG's long position.| ETFS Enhanced vs. ETFS Battery Tech | ETFS Enhanced vs. ETFS Ultra Long | ETFS Enhanced vs. ETFS Ultra Short | ETFS Enhanced vs. ETFS FANG ETF |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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