Correlation Between DUDE and ETF Series

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

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

Diversification Opportunities for DUDE and ETF Series

0.0

Correlation Coefficient

DUDE  ETF Series

Pay attention - limited upside

The 3 months correlation between DUDE and ETF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DUDE and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions and DUDE 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 DUDE are associated (or correlated) with ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of DUDE i.e., DUDE and ETF Series go up and down completely randomly.

Pair Corralation between DUDE and ETF Series

If you would invest  2,362  in ETF Series Solutions on December 17, 2024 and sell it today you would earn a total of  249.00  from holding ETF Series Solutions or generate 10.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

DUDE  vs.  ETF Series Solutions

DUDE

Risk-Adjusted Performance

Very Weak

Over the last 90 days DUDE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, DUDE is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

ETF Series Solutions

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ETF Series Solutions are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, ETF Series may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with DUDE and ETF Series

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

The idea behind DUDE and ETF Series Solutions 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.