Correlation Between ETF Series and Vulcan Value
Can any of the company-specific risk be diversified away by investing in both ETF Series and Vulcan Value 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 ETF Series and Vulcan Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETF Series Solutions and Vulcan Value Partners, you can compare the effects of market volatilities on ETF Series and Vulcan Value 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 ETF Series with a short position of Vulcan Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETF Series and Vulcan Value.
Diversification Opportunities for ETF Series and Vulcan Value
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between ETF and Vulcan is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding ETF Series Solutions and Vulcan Value Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Value Partners and ETF Series 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 ETF Series Solutions are associated (or correlated) with Vulcan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Value Partners has no effect on the direction of ETF Series i.e., ETF Series and Vulcan Value go up and down completely randomly.
Pair Corralation between ETF Series and Vulcan Value
Given the investment horizon of 90 days ETF Series Solutions is expected to generate 0.12 times more return on investment than Vulcan Value. However, ETF Series Solutions is 8.11 times less risky than Vulcan Value. It trades about 0.12 of its potential returns per unit of risk. Vulcan Value Partners is currently generating about -0.13 per unit of risk. If you would invest 2,513 in ETF Series Solutions on December 5, 2024 and sell it today you would earn a total of 6.00 from holding ETF Series Solutions or generate 0.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ETF Series Solutions vs. Vulcan Value Partners
Performance |
Timeline |
ETF Series Solutions |
Vulcan Value Partners |
ETF Series and Vulcan Value Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ETF Series and Vulcan Value
The main advantage of trading using opposite ETF Series and Vulcan Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETF Series position performs unexpectedly, Vulcan Value 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 Vulcan Value will offset losses from the drop in Vulcan Value's long position.ETF Series vs. Strategy Shares | ETF Series vs. Freedom Day Dividend | ETF Series vs. Franklin Templeton ETF | ETF Series vs. iShares MSCI China |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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