diversifiable risk of combining Aptus Defined and Akros Monthly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptus Defined Risk and Akros Monthly Payout, you can compare the effects of market volatilities on Aptus Defined and Akros Monthly 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 Aptus Defined with a short position of Akros Monthly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptus Defined and Akros Monthly.
Diversification Opportunities for Aptus Defined and Akros Monthly
Pair Corralation between Aptus Defined and Akros Monthly
Given the investment horizon of 90 days Aptus Defined is expected to generate 4.2 times less return on investment than Akros Monthly. But when comparing it to its historical volatility, Aptus Defined Risk is 1.73 times less risky than Akros Monthly. It trades about 0.11 of its potential returns per unit of risk. Akros Monthly Payout is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 2,303 in Akros Monthly Payout on December 3, 2023 and sell it today you would earn a total of 130.00 from holding Akros Monthly Payout or generate 5.64% return on investment over 90 days.
Aptus Defined Risk vs. Akros Monthly Payout
Aptus Defined and Akros Monthly Volatility Contrast
Pair Trading with Aptus Defined and Akros MonthlyThe main advantage of trading using opposite Aptus Defined and Akros Monthly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptus Defined position performs unexpectedly, Akros Monthly 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 Akros Monthly will offset losses from the drop in Akros Monthly's long position. The idea behind Aptus Defined Risk and Akros Monthly Payout 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.
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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