Correlation Between Swan Hedged and Elevation Series

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

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

Diversification Opportunities for Swan Hedged and Elevation Series

0.51

Correlation Coefficient

Swan Hedged  Elevation Series

Very weak diversification

The 3 months correlation between Swan and Elevation is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Swan Hedged Equity and Elevation Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevation Series Trust and Swan Hedged 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 Swan Hedged Equity are associated (or correlated) with Elevation Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevation Series Trust has no effect on the direction of Swan Hedged i.e., Swan Hedged and Elevation Series go up and down completely randomly.

Pair Corralation between Swan Hedged and Elevation Series

Given the investment horizon of 90 days Swan Hedged Equity is expected to under-perform the Elevation Series. But the etf apears to be less risky and, when comparing its historical volatility, Swan Hedged Equity is 2.46 times less risky than Elevation Series. The etf trades about -0.06 of its potential returns per unit of risk. The Elevation Series Trust is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,593  in Elevation Series Trust on December 18, 2024 and sell it today you would earn a total of  51.00  from holding Elevation Series Trust or generate 1.97% return on investment over 90 days.

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

Swan Hedged Equity  vs.  Elevation Series Trust

Swan Hedged Equity

Risk-Adjusted Performance

Very Weak

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

Elevation Series Trust

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Elevation Series Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Elevation Series is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Swan Hedged and Elevation Series

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

The idea behind Swan Hedged Equity and Elevation Series Trust 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.