Correlation Between Exchange Traded and Transportation Fund

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

Diversification Opportunities for Exchange Traded and Transportation Fund

0.82

Correlation Coefficient

Exchange Traded  Transportation Fund

Very poor diversification

The 3 months correlation between Exchange and Transportation is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts and Transportation Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportation Fund 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 Transportation Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportation Fund has no effect on the direction of Exchange Traded i.e., Exchange Traded and Transportation Fund go up and down completely randomly.

Pair Corralation between Exchange Traded and Transportation Fund

Given the investment horizon of 90 days Exchange Traded is expected to generate 1.63 times less return on investment than Transportation Fund. But when comparing it to its historical volatility, Exchange Traded Concepts is 1.45 times less risky than Transportation Fund. It trades about 0.13 of its potential returns per unit of risk. Transportation Fund Investor is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  6,067  in Transportation Fund Investor on July 30, 2025 and sell it today you would earn a total of  624.00  from holding Transportation Fund Investor or generate 10.29% return on investment over 90 days.

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

Exchange Traded Concepts  vs.  Transportation Fund Investor

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 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental drivers, Exchange Traded is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Transportation Fund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Transportation Fund Investor are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Transportation Fund may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Exchange Traded and Transportation Fund

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

The idea behind Exchange Traded Concepts and Transportation Fund Investor 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.