Correlation Between FT Vest and THE HILLMAN

Can any of the company-specific risk be diversified away by investing in both FT Vest and THE HILLMAN 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 FT Vest and THE HILLMAN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FT Vest Equity and THE HILLMAN FUND, you can compare the effects of market volatilities on FT Vest and THE HILLMAN 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 FT Vest with a short position of THE HILLMAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Vest and THE HILLMAN.

Diversification Opportunities for FT Vest and THE HILLMAN

0.04

Correlation Coefficient

FT Vest  THE HILLMAN

Significant diversification

The 3 months correlation between DHDG and THE is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding FT Vest Equity and THE HILLMAN FUND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THE HILLMAN FUND and FT Vest 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 FT Vest Equity are associated (or correlated) with THE HILLMAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THE HILLMAN FUND has no effect on the direction of FT Vest i.e., FT Vest and THE HILLMAN go up and down completely randomly.

Pair Corralation between FT Vest and THE HILLMAN

Given the investment horizon of 90 days FT Vest Equity is expected to under-perform the THE HILLMAN. But the etf apears to be less risky and, when comparing its historical volatility, FT Vest Equity is 2.24 times less risky than THE HILLMAN. The etf trades about -0.09 of its potential returns per unit of risk. The THE HILLMAN FUND is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,869  in THE HILLMAN FUND on November 29, 2024 and sell it today you would earn a total of  6.00  from holding THE HILLMAN FUND or generate 0.21% return on investment over 90 days.

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

FT Vest Equity  vs.  THE HILLMAN FUND

FT Vest Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days FT Vest Equity has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, FT Vest is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

THE HILLMAN FUND

Risk-Adjusted Performance

Very Weak

Over the last 90 days THE HILLMAN FUND has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with FT Vest and THE HILLMAN

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

The idea behind FT Vest Equity and THE HILLMAN FUND 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..