Correlation Between Coreshares Index and FNB ETN

Can any of the company-specific risk be diversified away by investing in both Coreshares Index and FNB ETN 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 Coreshares Index and FNB ETN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coreshares Index Tracker and FNB ETN on, you can compare the effects of market volatilities on Coreshares Index and FNB ETN 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 Coreshares Index with a short position of FNB ETN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coreshares Index and FNB ETN.

Diversification Opportunities for Coreshares Index and FNB ETN

0.25

Correlation Coefficient

Coreshares Index  FNB ETN

Modest diversification

The 3 months correlation between Coreshares and FNB is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Coreshares Index Tracker and FNB ETN on in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB ETN on and Coreshares Index 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 Coreshares Index Tracker are associated (or correlated) with FNB ETN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB ETN on has no effect on the direction of Coreshares Index i.e., Coreshares Index and FNB ETN go up and down completely randomly.

Pair Corralation between Coreshares Index and FNB ETN

Assuming the 90 days trading horizon Coreshares Index Tracker is expected to generate 0.21 times more return on investment than FNB ETN. However, Coreshares Index Tracker is 4.66 times less risky than FNB ETN. It trades about -0.02 of its potential returns per unit of risk. FNB ETN on is currently generating about -0.1 per unit of risk. If you would invest  111,161  in Coreshares Index Tracker on October 27, 2024 and sell it today you would lose (461.00) from holding Coreshares Index Tracker or give up 0.41% of portfolio value over 90 days.

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

Coreshares Index Tracker  vs.  FNB ETN on

Coreshares Index Tracker

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coreshares Index Tracker has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Coreshares Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

FNB ETN on

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FNB ETN on are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, FNB ETN sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coreshares Index and FNB ETN

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

The idea behind Coreshares Index Tracker and FNB ETN on 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.