Correlation Between HCM Defender and MicroSectors FANG

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

By analyzing existing cross correlation between HCM Defender 100 and MicroSectors FANG ETN, you can compare the effects of market volatilities on HCM Defender and MicroSectors FANG 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 HCM Defender with a short position of MicroSectors FANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of HCM Defender and MicroSectors FANG.

Diversification Opportunities for HCM Defender and MicroSectors FANG

0.92

Correlation Coefficient

HCM Defender  MicroSectors FANG

Almost no diversification

The 3 months correlation between HCM and MicroSectors is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding HCM Defender 100 and MicroSectors FANG ETN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors FANG ETN and HCM Defender 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 HCM Defender 100 are associated (or correlated) with MicroSectors FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors FANG ETN has no effect on the direction of HCM Defender i.e., HCM Defender and MicroSectors FANG go up and down completely randomly.

Pair Corralation between HCM Defender and MicroSectors FANG

Considering the 90-day investment horizon HCM Defender is expected to generate 1.91 times less return on investment than MicroSectors FANG. In addition to that, HCM Defender is 1.11 times more volatile than MicroSectors FANG ETN. It trades about 0.04 of its total potential returns per unit of risk. MicroSectors FANG ETN is currently generating about 0.09 per unit of volatility. If you would invest  6,574  in MicroSectors FANG ETN on August 26, 2025 and sell it today you would earn a total of  476.00  from holding MicroSectors FANG ETN or generate 7.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

HCM Defender 100  vs.  MicroSectors FANG ETN

HCM Defender 100

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in HCM Defender 100 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, HCM Defender is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

MicroSectors FANG ETN

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in MicroSectors FANG ETN are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, MicroSectors FANG may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with HCM Defender and MicroSectors FANG

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

The idea behind HCM Defender 100 and MicroSectors FANG ETN 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.