Correlation Between FT Cboe and MicroSectors Gold

Can any of the company-specific risk be diversified away by investing in both FT Cboe and MicroSectors Gold 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 FT Cboe and MicroSectors Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FT Cboe Vest and MicroSectors Gold Miners, you can compare the effects of market volatilities on FT Cboe and MicroSectors Gold 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 FT Cboe with a short position of MicroSectors Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Cboe and MicroSectors Gold.

Diversification Opportunities for FT Cboe and MicroSectors Gold

-0.67

Correlation Coefficient

FT Cboe  MicroSectors Gold

Excellent diversification

The 3 months correlation between BUFD and MicroSectors is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding FT Cboe Vest and MicroSectors Gold Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors Gold Miners and FT Cboe 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 FT Cboe Vest are associated (or correlated) with MicroSectors Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors Gold Miners has no effect on the direction of FT Cboe i.e., FT Cboe and MicroSectors Gold go up and down completely randomly.

Pair Corralation between FT Cboe and MicroSectors Gold

Given the investment horizon of 90 days FT Cboe Vest is expected to generate 0.07 times more return on investment than MicroSectors Gold. However, FT Cboe Vest is 14.7 times less risky than MicroSectors Gold. It trades about 0.35 of its potential returns per unit of risk. MicroSectors Gold Miners is currently generating about -0.08 per unit of risk. If you would invest  2,430  in FT Cboe Vest on April 23, 2025 and sell it today you would earn a total of  246.00  from holding FT Cboe Vest or generate 10.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

FT Cboe Vest  vs.  MicroSectors Gold Miners

FT Cboe Vest

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in FT Cboe Vest are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, FT Cboe may actually be approaching a critical reversion point that can send shares even higher in August 2025.

MicroSectors Gold Miners

Risk-Adjusted Performance

Very Weak

Over the last 90 days MicroSectors Gold Miners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's basic indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Pair Trading with FT Cboe and MicroSectors Gold

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

The idea behind FT Cboe Vest and MicroSectors Gold Miners 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.

Check out your portfolio center.

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.