Correlation Between Tuttle Capital and IShares Emerging

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

By analyzing existing cross correlation between Tuttle Capital Management and iShares Emerging Markets, you can compare the effects of market volatilities on Tuttle Capital and IShares Emerging 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 Tuttle Capital with a short position of IShares Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tuttle Capital and IShares Emerging.

Diversification Opportunities for Tuttle Capital and IShares Emerging

-0.68

Correlation Coefficient

Tuttle Capital  IShares Emerging

Excellent diversification

The 3 months correlation between Tuttle and IShares is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Tuttle Capital Management and iShares Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Emerging Markets and Tuttle Capital 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 Tuttle Capital Management are associated (or correlated) with IShares Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Emerging Markets has no effect on the direction of Tuttle Capital i.e., Tuttle Capital and IShares Emerging go up and down completely randomly.

Pair Corralation between Tuttle Capital and IShares Emerging

Given the investment horizon of 90 days Tuttle Capital Management is expected to generate 0.78 times more return on investment than IShares Emerging. However, Tuttle Capital Management is 1.27 times less risky than IShares Emerging. It trades about 0.14 of its potential returns per unit of risk. iShares Emerging Markets is currently generating about 0.0 per unit of risk. If you would invest  2,184  in Tuttle Capital Management on October 9, 2024 and sell it today you would earn a total of  343.49  from holding Tuttle Capital Management or generate 15.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	26.41%
Values	Daily Returns

Tuttle Capital Management  vs.  iShares Emerging Markets

Tuttle Capital Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tuttle Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Tuttle Capital is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

iShares Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Emerging Markets has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, IShares Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tuttle Capital and IShares Emerging

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

The idea behind Tuttle Capital Management and iShares Emerging Markets 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.