Correlation Between Core Alternative and Aptus Collared

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

By analyzing existing cross correlation between Core Alternative ETF and Aptus Collared Income, you can compare the effects of market volatilities on Core Alternative and Aptus Collared 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 Core Alternative with a short position of Aptus Collared. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Alternative and Aptus Collared.

Diversification Opportunities for Core Alternative and Aptus Collared

-0.72

Correlation Coefficient

Core Alternative  Aptus Collared

Pay attention - limited upside

The 3 months correlation between Core and Aptus is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Core Alternative ETF and Aptus Collared Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptus Collared Income and Core Alternative 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 Core Alternative ETF are associated (or correlated) with Aptus Collared. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptus Collared Income has no effect on the direction of Core Alternative i.e., Core Alternative and Aptus Collared go up and down completely randomly.

Pair Corralation between Core Alternative and Aptus Collared

Given the investment horizon of 90 days Core Alternative ETF is expected to under-perform the Aptus Collared. But the etf apears to be less risky and, when comparing its historical volatility, Core Alternative ETF is 1.12 times less risky than Aptus Collared. The etf trades about -0.19 of its potential returns per unit of risk. The Aptus Collared Income is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  3,916  in Aptus Collared Income on September 16, 2024 and sell it today you would earn a total of  187.00  from holding Aptus Collared Income or generate 4.78% return on investment over 90 days.

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

Core Alternative ETF  vs.  Aptus Collared Income

Core Alternative ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Core Alternative ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Core Alternative is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Aptus Collared Income

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aptus Collared Income are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Aptus Collared is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Core Alternative and Aptus Collared

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

The idea behind Core Alternative ETF and Aptus Collared Income 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.