Correlation Between Exchange Traded and Madison Investors

Can any of the company-specific risk be diversified away by investing in both Exchange Traded and Madison Investors 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 Madison Investors 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 Madison Investors Fund, you can compare the effects of market volatilities on Exchange Traded and Madison Investors 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 Madison Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Traded and Madison Investors.

Diversification Opportunities for Exchange Traded and Madison Investors

0.3

Correlation Coefficient

Exchange Traded  Madison Investors

Weak diversification

The 3 months correlation between Exchange and Madison is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts and Madison Investors Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Investors 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 Madison Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Investors has no effect on the direction of Exchange Traded i.e., Exchange Traded and Madison Investors go up and down completely randomly.

Pair Corralation between Exchange Traded and Madison Investors

Given the investment horizon of 90 days Exchange Traded Concepts is expected to generate 1.15 times more return on investment than Madison Investors. However, Exchange Traded is 1.15 times more volatile than Madison Investors Fund. It trades about 0.01 of its potential returns per unit of risk. Madison Investors Fund is currently generating about 0.0 per unit of risk. If you would invest  2,769  in Exchange Traded Concepts on July 24, 2025 and sell it today you would earn a total of  6.00  from holding Exchange Traded Concepts or generate 0.22% return on investment over 90 days.

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

Exchange Traded Concepts  vs.  Madison Investors Fund

Exchange Traded Concepts

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Exchange Traded Concepts are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Exchange Traded is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Madison Investors

Risk-Adjusted Performance

Weakest

Over the last 90 days Madison Investors Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Madison Investors is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Exchange Traded and Madison Investors

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

The idea behind Exchange Traded Concepts and Madison Investors Fund 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.