Correlation Between Formidable ETF and BFIT

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

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

Diversification Opportunities for Formidable ETF and BFIT

0.0

Correlation Coefficient

Formidable ETF  BFIT

Pay attention - limited upside

The 3 months correlation between Formidable and BFIT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Formidable ETF and BFIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BFIT 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 BFIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BFIT has no effect on the direction of Formidable ETF i.e., Formidable ETF and BFIT go up and down completely randomly.

Pair Corralation between Formidable ETF and BFIT

If you would invest  2,139  in BFIT on September 17, 2024 and sell it today you would earn a total of  0.00  from holding BFIT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	3.08%
Values	Daily Returns

Formidable ETF  vs.  BFIT

Formidable ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Formidable ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Formidable ETF is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

BFIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BFIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, BFIT is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Formidable ETF and BFIT

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

The idea behind Formidable ETF and BFIT 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 Global Correlations module to find global opportunities by holding instruments from different markets.