Correlation Between Exchange Listed and ETC 6

Can any of the company-specific risk be diversified away by investing in both Exchange Listed and ETC 6 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 Exchange Listed and ETC 6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Exchange Listed Funds and ETC 6 Meridian, you can compare the effects of market volatilities on Exchange Listed and ETC 6 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 Exchange Listed with a short position of ETC 6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Listed and ETC 6.

Diversification Opportunities for Exchange Listed and ETC 6

0.76

Correlation Coefficient

Exchange Listed  ETC 6

Poor diversification

The 3 months correlation between Exchange and ETC is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Listed Funds and ETC 6 Meridian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETC 6 Meridian and Exchange Listed 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 Exchange Listed Funds are associated (or correlated) with ETC 6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETC 6 Meridian has no effect on the direction of Exchange Listed i.e., Exchange Listed and ETC 6 go up and down completely randomly.

Pair Corralation between Exchange Listed and ETC 6

Given the investment horizon of 90 days Exchange Listed Funds is expected to generate 1.51 times more return on investment than ETC 6. However, Exchange Listed is 1.51 times more volatile than ETC 6 Meridian. It trades about 0.0 of its potential returns per unit of risk. ETC 6 Meridian is currently generating about -0.05 per unit of risk. If you would invest  4,315  in Exchange Listed Funds on September 27, 2024 and sell it today you would lose (6.00) from holding Exchange Listed Funds or give up 0.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.67%
Values	Daily Returns

Exchange Listed Funds  vs.  ETC 6 Meridian

Exchange Listed Funds

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exchange Listed Funds has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Exchange Listed is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

ETC 6 Meridian

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ETC 6 Meridian has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, ETC 6 is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Exchange Listed and ETC 6

The main advantage of trading using opposite Exchange Listed and ETC 6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Listed position performs unexpectedly, ETC 6 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 ETC 6 will offset losses from the drop in ETC 6's long position.

The idea behind Exchange Listed Funds and ETC 6 Meridian 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..