Correlation Between CoreShares TotalWldStock and FNB ETN

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

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

Diversification Opportunities for CoreShares TotalWldStock and FNB ETN

0.91

Correlation Coefficient

CoreShares TotalWldStock  FNB ETN

Almost no diversification

The 3 months correlation between CoreShares and FNB is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding CoreShares TotalWldStock ETF and FNB ETN JPMORGQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB ETN JPMORGQ and CoreShares TotalWldStock 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 CoreShares TotalWldStock ETF are associated (or correlated) with FNB ETN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB ETN JPMORGQ has no effect on the direction of CoreShares TotalWldStock i.e., CoreShares TotalWldStock and FNB ETN go up and down completely randomly.

Pair Corralation between CoreShares TotalWldStock and FNB ETN

Assuming the 90 days trading horizon CoreShares TotalWldStock is expected to generate 5.28 times less return on investment than FNB ETN. But when comparing it to its historical volatility, CoreShares TotalWldStock ETF is 2.16 times less risky than FNB ETN. It trades about 0.11 of its potential returns per unit of risk. FNB ETN JPMORGQ is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  217,100  in FNB ETN JPMORGQ on September 14, 2024 and sell it today you would earn a total of  40,200  from holding FNB ETN JPMORGQ or generate 18.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	57.14%
Values	Daily Returns

CoreShares TotalWldStock ETF  vs.  FNB ETN JPMORGQ

CoreShares TotalWldStock

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CoreShares TotalWldStock ETF are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, CoreShares TotalWldStock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

FNB ETN JPMORGQ

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FNB ETN JPMORGQ are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, FNB ETN sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CoreShares TotalWldStock and FNB ETN

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

The idea behind CoreShares TotalWldStock ETF and FNB ETN JPMORGQ 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 Transaction History module to view history of all your transactions and understand their impact on performance.