Correlation Between Formidable Fortress and Alpha Architect
Can any of the company-specific risk be diversified away by investing in both Formidable Fortress and Alpha Architect 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 Fortress and Alpha Architect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formidable Fortress ETF and Alpha Architect Global, you can compare the effects of market volatilities on Formidable Fortress and Alpha Architect 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 Fortress with a short position of Alpha Architect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formidable Fortress and Alpha Architect.
Diversification Opportunities for Formidable Fortress and Alpha Architect
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Formidable and Alpha is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Formidable Fortress ETF and Alpha Architect Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Architect Global and Formidable Fortress 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 Fortress ETF are associated (or correlated) with Alpha Architect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Architect Global has no effect on the direction of Formidable Fortress i.e., Formidable Fortress and Alpha Architect go up and down completely randomly.
Pair Corralation between Formidable Fortress and Alpha Architect
Given the investment horizon of 90 days Formidable Fortress ETF is expected to under-perform the Alpha Architect. But the etf apears to be less risky and, when comparing its historical volatility, Formidable Fortress ETF is 1.25 times less risky than Alpha Architect. The etf trades about -0.05 of its potential returns per unit of risk. The Alpha Architect Global is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,788 in Alpha Architect Global on August 26, 2025 and sell it today you would earn a total of 51.00 from holding Alpha Architect Global or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Formidable Fortress ETF vs. Alpha Architect Global
Performance |
| Timeline |
| Formidable Fortress ETF |
| Alpha Architect Global |
Formidable Fortress and Alpha Architect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Formidable Fortress and Alpha Architect
The main advantage of trading using opposite Formidable Fortress and Alpha Architect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formidable Fortress position performs unexpectedly, Alpha Architect 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 Alpha Architect will offset losses from the drop in Alpha Architect's long position.| Formidable Fortress vs. Formidable ETF | Formidable Fortress vs. Pacer Swan SOS | Formidable Fortress vs. RiverFront Dynamic Flex Cap | Formidable Fortress vs. Invesco Multi Strategy Alternative |
| Alpha Architect vs. Formidable ETF | Alpha Architect vs. Harbor ETF Trust | Alpha Architect vs. American Century ETF | Alpha Architect vs. Exchange Traded Concepts |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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