Correlation Between Swan Hedged and ETF Series
Can any of the company-specific risk be diversified away by investing in both Swan Hedged and ETF Series 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 Swan Hedged and ETF Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swan Hedged Equity and ETF Series Solutions, you can compare the effects of market volatilities on Swan Hedged and ETF Series 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 Swan Hedged with a short position of ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swan Hedged and ETF Series.
Diversification Opportunities for Swan Hedged and ETF Series
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Swan and ETF is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Swan Hedged Equity and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions and Swan Hedged 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 Swan Hedged Equity are associated (or correlated) with ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of Swan Hedged i.e., Swan Hedged and ETF Series go up and down completely randomly.
Pair Corralation between Swan Hedged and ETF Series
Given the investment horizon of 90 days Swan Hedged is expected to generate 1.24 times less return on investment than ETF Series. But when comparing it to its historical volatility, Swan Hedged Equity is 1.74 times less risky than ETF Series. It trades about 0.23 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,448 in ETF Series Solutions on May 29, 2025 and sell it today you would earn a total of 253.00 from holding ETF Series Solutions or generate 7.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Swan Hedged Equity vs. ETF Series Solutions
Performance |
| Timeline |
| Swan Hedged Equity |
| ETF Series Solutions |
Swan Hedged and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swan Hedged and ETF Series
The main advantage of trading using opposite Swan Hedged and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swan Hedged position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' long position.| Swan Hedged vs. Amplify BlackSwan Growth | Swan Hedged vs. Invesco SP 500 | Swan Hedged vs. Simplify Exchange Traded | Swan Hedged vs. Simplify Equity PLUS |
| ETF Series vs. Strategy Shares | ETF Series vs. Freedom Day Dividend | ETF Series vs. iShares MSCI China | ETF Series vs. iShares Dividend and |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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