Correlation Between Aptus Drawdown and Listed Funds

Can any of the company-specific risk be diversified away by investing in both Aptus Drawdown and Listed Funds 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 Aptus Drawdown and Listed Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aptus Drawdown Managed and Listed Funds Trust, you can compare the effects of market volatilities on Aptus Drawdown and Listed Funds 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 Aptus Drawdown with a short position of Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptus Drawdown and Listed Funds.

Diversification Opportunities for Aptus Drawdown and Listed Funds

0.75

Correlation Coefficient

Aptus Drawdown  Listed Funds

Poor diversification

The 3 months correlation between Aptus and Listed is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Aptus Drawdown Managed and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust and Aptus Drawdown 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 Aptus Drawdown Managed are associated (or correlated) with Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of Aptus Drawdown i.e., Aptus Drawdown and Listed Funds go up and down completely randomly.

Pair Corralation between Aptus Drawdown and Listed Funds

Given the investment horizon of 90 days Aptus Drawdown Managed is expected to under-perform the Listed Funds. But the etf apears to be less risky and, when comparing its historical volatility, Aptus Drawdown Managed is 1.07 times less risky than Listed Funds. The etf trades about -0.11 of its potential returns per unit of risk. The Listed Funds Trust is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,640  in Listed Funds Trust on October 11, 2024 and sell it today you would earn a total of  77.00  from holding Listed Funds Trust or generate 2.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Aptus Drawdown Managed  vs.  Listed Funds Trust

Aptus Drawdown Managed

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aptus Drawdown Managed are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Aptus Drawdown is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Listed Funds Trust

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Listed Funds Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady essential indicators, Listed Funds may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Aptus Drawdown and Listed Funds

The main advantage of trading using opposite Aptus Drawdown and Listed Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptus Drawdown position performs unexpectedly, Listed Funds 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 Listed Funds will offset losses from the drop in Listed Funds' long position.

The idea behind Aptus Drawdown Managed and Listed Funds Trust 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.