Correlation Between Formidable ETF and American Customer

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

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

Diversification Opportunities for Formidable ETF and American Customer

0.96

Correlation Coefficient

Formidable ETF  American Customer

Almost no diversification

The 3 months correlation between Formidable and American is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Formidable ETF and American Customer Satisfaction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Customer and Formidable ETF 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 Formidable ETF are associated (or correlated) with American Customer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Customer has no effect on the direction of Formidable ETF i.e., Formidable ETF and American Customer go up and down completely randomly.

Pair Corralation between Formidable ETF and American Customer

Given the investment horizon of 90 days Formidable ETF is expected to generate 1.05 times more return on investment than American Customer. However, Formidable ETF is 1.05 times more volatile than American Customer Satisfaction. It trades about 0.23 of its potential returns per unit of risk. American Customer Satisfaction is currently generating about 0.19 per unit of risk. If you would invest  2,102  in Formidable ETF on May 1, 2025 and sell it today you would earn a total of  230.00  from holding Formidable ETF or generate 10.94% return on investment over 90 days.

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

Formidable ETF  vs.  American Customer Satisfaction

Formidable ETF

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Formidable ETF are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Formidable ETF may actually be approaching a critical reversion point that can send shares even higher in August 2025.

American Customer

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in American Customer Satisfaction are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, American Customer may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Formidable ETF and American Customer

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

The idea behind Formidable ETF and American Customer Satisfaction 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.