Correlation Between FT AlphaDEX and Ether Fund

Can any of the company-specific risk be diversified away by investing in both FT AlphaDEX and Ether Fund 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 Ether Fund 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 Ether Fund, you can compare the effects of market volatilities on FT AlphaDEX and Ether Fund 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 Ether Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT AlphaDEX and Ether Fund.

Diversification Opportunities for FT AlphaDEX and Ether Fund

0.8

Correlation Coefficient

FT AlphaDEX  Ether Fund

Very poor diversification

The 3 months correlation between FHG and Ether is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding FT AlphaDEX Industrials and Ether Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ether Fund 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 Ether Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ether Fund has no effect on the direction of FT AlphaDEX i.e., FT AlphaDEX and Ether Fund go up and down completely randomly.

Pair Corralation between FT AlphaDEX and Ether Fund

Assuming the 90 days trading horizon FT AlphaDEX is expected to generate 1.03 times less return on investment than Ether Fund. But when comparing it to its historical volatility, FT AlphaDEX Industrials is 3.55 times less risky than Ether Fund. It trades about 0.1 of its potential returns per unit of risk. Ether Fund is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7,043  in Ether Fund on October 13, 2024 and sell it today you would earn a total of  356.00  from holding Ether Fund or generate 5.05% return on investment over 90 days.

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

FT AlphaDEX Industrials  vs.  Ether Fund

FT AlphaDEX Industrials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FT AlphaDEX Industrials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, FT AlphaDEX is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Ether Fund

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ether Fund are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Ether Fund displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FT AlphaDEX and Ether Fund

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

The idea behind FT AlphaDEX Industrials and Ether 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.