Correlation Between NEOS ETF and FT Vest

Can any of the company-specific risk be diversified away by investing in both NEOS ETF and FT Vest 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 NEOS ETF and FT Vest into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NEOS ETF Trust and FT Vest Technology, you can compare the effects of market volatilities on NEOS ETF and FT Vest 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 NEOS ETF with a short position of FT Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEOS ETF and FT Vest.

Diversification Opportunities for NEOS ETF and FT Vest

-0.59

Correlation Coefficient

NEOS ETF  FT Vest

Excellent diversification

The 3 months correlation between NEOS and TDVI is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NEOS ETF Trust and FT Vest Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Vest Technology and NEOS ETF 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 NEOS ETF Trust are associated (or correlated) with FT Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Vest Technology has no effect on the direction of NEOS ETF i.e., NEOS ETF and FT Vest go up and down completely randomly.

Pair Corralation between NEOS ETF and FT Vest

Given the investment horizon of 90 days NEOS ETF Trust is expected to generate 10.08 times more return on investment than FT Vest. However, NEOS ETF is 10.08 times more volatile than FT Vest Technology. It trades about 0.13 of its potential returns per unit of risk. FT Vest Technology is currently generating about -0.05 per unit of risk. If you would invest  2,614  in NEOS ETF Trust on December 27, 2024 and sell it today you would earn a total of  2,384  from holding NEOS ETF Trust or generate 91.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	91.8%
Values	Daily Returns

NEOS ETF Trust  vs.  FT Vest Technology

NEOS ETF Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NEOS ETF Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, NEOS ETF demonstrated solid returns over the last few months and may actually be approaching a breakup point.

FT Vest Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days FT Vest Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, FT Vest is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with NEOS ETF and FT Vest

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

The idea behind NEOS ETF Trust and FT Vest Technology 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.