Correlation Between FrontView REIT, and ETC Group

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

By analyzing existing cross correlation between FrontView REIT, and ETC Group Global, you can compare the effects of market volatilities on FrontView REIT, and ETC Group 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 FrontView REIT, with a short position of ETC Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of FrontView REIT, and ETC Group.

Diversification Opportunities for FrontView REIT, and ETC Group

-0.13

Correlation Coefficient

FrontView REIT,  ETC Group

Good diversification

The 3 months correlation between FrontView and ETC is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding FrontView REIT, and ETC Group Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETC Group Global and FrontView REIT, 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 FrontView REIT, are associated (or correlated) with ETC Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETC Group Global has no effect on the direction of FrontView REIT, i.e., FrontView REIT, and ETC Group go up and down completely randomly.

Pair Corralation between FrontView REIT, and ETC Group

Considering the 90-day investment horizon FrontView REIT, is expected to under-perform the ETC Group. But the stock apears to be less risky and, when comparing its historical volatility, FrontView REIT, is 1.12 times less risky than ETC Group. The stock trades about -0.04 of its potential returns per unit of risk. The ETC Group Global is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,036  in ETC Group Global on October 7, 2024 and sell it today you would earn a total of  225.00  from holding ETC Group Global or generate 21.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

FrontView REIT,  vs.  ETC Group Global

FrontView REIT,

Risk-Adjusted Performance

0 of 100

Very Weak

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

ETC Group Global

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ETC Group Global are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ETC Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FrontView REIT, and ETC Group

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

The idea behind FrontView REIT, and ETC Group Global 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.