Correlation Between Hull Tactical and ARK Innovation

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Can any of the company-specific risk be diversified away by investing in both Hull Tactical and ARK Innovation 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 Hull Tactical and ARK Innovation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hull Tactical US and ARK Innovation ETF, you can compare the effects of market volatilities on Hull Tactical and ARK Innovation 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 Hull Tactical with a short position of ARK Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hull Tactical and ARK Innovation.

Diversification Opportunities for Hull Tactical and ARK Innovation

  Correlation Coefficient

Poor diversification

The 3 months correlation between Hull Tactical and ARK Innovation is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hull Tactical US and ARK Innovation ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARK Innovation ETF and Hull Tactical 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 Hull Tactical US are associated (or correlated) with ARK Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARK Innovation ETF has no effect on the direction of Hull Tactical i.e., Hull Tactical and ARK Innovation go up and down completely randomly.

Pair Corralation between Hull Tactical and ARK Innovation

Given the investment horizon of 90 days Hull Tactical US is expected to generate 0.55 times more return on investment than ARK Innovation. However, Hull Tactical US is 1.81 times less risky than ARK Innovation. It trades about -0.04 of its potential returns per unit of risk. ARK Innovation ETF is currently generating about -0.04 per unit of risk. If you would invest  2,893  in Hull Tactical US on December 27, 2022 and sell it today you would lose (46.00)  from holding Hull Tactical US or give up 1.59% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Hull Tactical US  vs.  ARK Innovation ETF

 Performance (%) 
Hull Tactical US 

Hull Tactical Performance

0 of 100

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

ARK Innovation Performance

10 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in ARK Innovation ETF are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile forward-looking signals, ARK Innovation disclosed solid returns over the last few months and may actually be approaching a breakup point.

Hull Tactical and ARK Innovation Volatility Contrast

   Predicted Return Density   

Pair Trading with Hull Tactical and ARK Innovation

The main advantage of trading using opposite Hull Tactical and ARK Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hull Tactical position performs unexpectedly, ARK Innovation 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 ARK Innovation will offset losses from the drop in ARK Innovation's long position.
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The idea behind Hull Tactical US and ARK Innovation ETF 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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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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