Correlation Between HANetf II and HANetf ICAV

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

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

Diversification Opportunities for HANetf II and HANetf ICAV

0.94

Correlation Coefficient

HANetf II  HANetf ICAV

Almost no diversification

The 3 months correlation between HANetf and HANetf is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding HANetf II ICAV and HANetf ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANetf ICAV and HANetf II 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 HANetf II ICAV are associated (or correlated) with HANetf ICAV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANetf ICAV has no effect on the direction of HANetf II i.e., HANetf II and HANetf ICAV go up and down completely randomly.

Pair Corralation between HANetf II and HANetf ICAV

Assuming the 90 days trading horizon HANetf II is expected to generate 3.53 times less return on investment than HANetf ICAV. But when comparing it to its historical volatility, HANetf II ICAV is 1.89 times less risky than HANetf ICAV. It trades about 0.14 of its potential returns per unit of risk. HANetf ICAV is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  746.00  in HANetf ICAV on October 22, 2024 and sell it today you would earn a total of  120.00  from holding HANetf ICAV or generate 16.09% return on investment over 90 days.

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

HANetf II ICAV  vs.  HANetf ICAV

HANetf II ICAV

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HANetf II ICAV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, HANetf II is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

HANetf ICAV

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HANetf ICAV are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, HANetf ICAV exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HANetf II and HANetf ICAV

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

The idea behind HANetf II ICAV and HANetf ICAV 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..