Correlation Between Exchange Traded and SMART Earnings

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

Diversification Opportunities for Exchange Traded and SMART Earnings

0.64

Correlation Coefficient

Exchange Traded  SMART Earnings

Poor diversification

The 3 months correlation between Exchange and SMART is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts and SMART Earnings Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMART Earnings Growth 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 SMART Earnings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMART Earnings Growth has no effect on the direction of Exchange Traded i.e., Exchange Traded and SMART Earnings go up and down completely randomly.

Pair Corralation between Exchange Traded and SMART Earnings

Given the investment horizon of 90 days Exchange Traded is expected to generate 375.89 times less return on investment than SMART Earnings. But when comparing it to its historical volatility, Exchange Traded Concepts is 154.31 times less risky than SMART Earnings. It trades about 0.05 of its potential returns per unit of risk. SMART Earnings Growth is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.00  in SMART Earnings Growth on August 17, 2025 and sell it today you would earn a total of  2,376  from holding SMART Earnings Growth or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Exchange Traded Concepts  vs.  SMART Earnings Growth

Exchange Traded Concepts

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Exchange Traded Concepts are ranked lower than 4 (%) 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.

SMART Earnings Growth

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in SMART Earnings Growth are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SMART Earnings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exchange Traded and SMART Earnings

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

The idea behind Exchange Traded Concepts and SMART Earnings Growth 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.