Correlation Between FT AlphaDEX and CI Galaxy
Can any of the company-specific risk be diversified away by investing in both FT AlphaDEX and CI Galaxy 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 AlphaDEX and CI Galaxy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FT AlphaDEX Industrials and CI Galaxy Multi Crypto, you can compare the effects of market volatilities on FT AlphaDEX and CI Galaxy 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 AlphaDEX with a short position of CI Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT AlphaDEX and CI Galaxy.
Diversification Opportunities for FT AlphaDEX and CI Galaxy
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FHG and CMCX-B is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding FT AlphaDEX Industrials and CI Galaxy Multi Crypto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Galaxy Multi and FT AlphaDEX 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 AlphaDEX Industrials are associated (or correlated) with CI Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Galaxy Multi has no effect on the direction of FT AlphaDEX i.e., FT AlphaDEX and CI Galaxy go up and down completely randomly.
Pair Corralation between FT AlphaDEX and CI Galaxy
Assuming the 90 days trading horizon FT AlphaDEX Industrials is expected to generate 0.68 times more return on investment than CI Galaxy. However, FT AlphaDEX Industrials is 1.46 times less risky than CI Galaxy. It trades about -0.07 of its potential returns per unit of risk. CI Galaxy Multi Crypto is currently generating about -0.07 per unit of risk. If you would invest 5,646 in FT AlphaDEX Industrials on December 28, 2024 and sell it today you would lose (295.00) from holding FT AlphaDEX Industrials or give up 5.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.39% |
Values | Daily Returns |
FT AlphaDEX Industrials vs. CI Galaxy Multi Crypto
Performance |
Timeline |
FT AlphaDEX Industrials |
CI Galaxy Multi |
FT AlphaDEX and CI Galaxy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FT AlphaDEX and CI Galaxy
The main advantage of trading using opposite FT AlphaDEX and CI Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FT AlphaDEX position performs unexpectedly, CI Galaxy 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 CI Galaxy will offset losses from the drop in CI Galaxy's long position.FT AlphaDEX vs. First Trust AlphaDEX | FT AlphaDEX vs. First Trust AlphaDEX | FT AlphaDEX vs. First Trust Senior | FT AlphaDEX vs. First Trust Value |
CI Galaxy vs. iShares SPTSX 60 | CI Galaxy vs. iShares Core SP | CI Galaxy vs. iShares Core SPTSX | CI Galaxy vs. BMO Aggregate Bond |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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