Correlation Between FundX Investment and Formidable ETF

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

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

Diversification Opportunities for FundX Investment and Formidable ETF

0.52

Correlation Coefficient

FundX Investment  Formidable ETF

Very weak diversification

The 3 months correlation between FundX and Formidable is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding FundX Investment Trust and Formidable ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formidable ETF and FundX Investment 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 FundX Investment Trust are associated (or correlated) with Formidable ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formidable ETF has no effect on the direction of FundX Investment i.e., FundX Investment and Formidable ETF go up and down completely randomly.

Pair Corralation between FundX Investment and Formidable ETF

Given the investment horizon of 90 days FundX Investment Trust is expected to generate 1.0 times more return on investment than Formidable ETF. However, FundX Investment is 1.0 times more volatile than Formidable ETF. It trades about -0.01 of its potential returns per unit of risk. Formidable ETF is currently generating about -0.17 per unit of risk. If you would invest  4,416  in FundX Investment Trust on December 2, 2024 and sell it today you would lose (32.00) from holding FundX Investment Trust or give up 0.72% of portfolio value over 90 days.

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

FundX Investment Trust  vs.  Formidable ETF

FundX Investment Trust

Risk-Adjusted Performance

Very Weak

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

Formidable ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days Formidable ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

Pair Trading with FundX Investment and Formidable ETF

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

The idea behind FundX Investment Trust and Formidable ETF 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.