Correlation Between Formidable ETF and FundX Investment

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

By analyzing existing cross correlation between Formidable ETF and FundX Investment Trust, you can compare the effects of market volatilities on Formidable ETF and FundX Investment 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 FundX Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formidable ETF and FundX Investment.

Diversification Opportunities for Formidable ETF and FundX Investment

0.84

Correlation Coefficient

Formidable ETF  FundX Investment

Very poor diversification

The 3 months correlation between Formidable and FundX is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Formidable ETF and FundX Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX Investment Trust 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 FundX Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX Investment Trust has no effect on the direction of Formidable ETF i.e., Formidable ETF and FundX Investment go up and down completely randomly.

Pair Corralation between Formidable ETF and FundX Investment

Given the investment horizon of 90 days Formidable ETF is expected to generate 1.43 times less return on investment than FundX Investment. In addition to that, Formidable ETF is 1.84 times more volatile than FundX Investment Trust. It trades about 0.12 of its total potential returns per unit of risk. FundX Investment Trust is currently generating about 0.32 per unit of volatility. If you would invest  4,261  in FundX Investment Trust on May 21, 2025 and sell it today you would earn a total of  288.10  from holding FundX Investment Trust or generate 6.76% return on investment over 90 days.

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

Formidable ETF  vs.  FundX Investment Trust

Formidable ETF

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Formidable ETF are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Formidable ETF is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

FundX Investment Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FundX Investment Trust are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, FundX Investment may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Formidable ETF and FundX Investment

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

The idea behind Formidable ETF and FundX Investment Trust 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.