Correlation Between Exchange Traded and FundX Investment

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

By analyzing existing cross correlation between Exchange Traded Concepts and FundX Investment Trust, you can compare the effects of market volatilities on Exchange Traded and FundX Investment 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 Traded with a short position of FundX Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Traded and FundX Investment.

Diversification Opportunities for Exchange Traded and FundX Investment

0.8

Correlation Coefficient

Exchange Traded  FundX Investment

Very poor diversification

The 3 months correlation between Exchange and FundX is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts and FundX Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX Investment Trust and Exchange Traded 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 Traded Concepts are associated (or correlated) with FundX Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX Investment Trust has no effect on the direction of Exchange Traded i.e., Exchange Traded and FundX Investment go up and down completely randomly.

Pair Corralation between Exchange Traded and FundX Investment

If you would invest  3,770  in FundX Investment Trust on September 12, 2024 and sell it today you would earn a total of  794.97  from holding FundX Investment Trust or generate 21.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	0.4%
Values	Daily Returns

Exchange Traded Concepts  vs.  FundX Investment Trust

Exchange Traded Concepts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exchange Traded Concepts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Exchange Traded is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

FundX Investment Trust

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FundX Investment Trust are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, FundX Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Exchange Traded and FundX Investment

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

The idea behind Exchange Traded Concepts and FundX Investment Trust 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.