Correlation Between Leverage Shares and Boost Issuer
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and Boost Issuer 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 Leverage Shares and Boost Issuer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 2x and Boost Issuer Public, you can compare the effects of market volatilities on Leverage Shares and Boost Issuer 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 Leverage Shares with a short position of Boost Issuer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and Boost Issuer.
Diversification Opportunities for Leverage Shares and Boost Issuer
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Leverage and Boost is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 2x and Boost Issuer Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boost Issuer Public and Leverage Shares 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 Leverage Shares 2x are associated (or correlated) with Boost Issuer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boost Issuer Public has no effect on the direction of Leverage Shares i.e., Leverage Shares and Boost Issuer go up and down completely randomly.
Pair Corralation between Leverage Shares and Boost Issuer
Assuming the 90 days trading horizon Leverage Shares 2x is expected to generate 5.5 times more return on investment than Boost Issuer. However, Leverage Shares is 5.5 times more volatile than Boost Issuer Public. It trades about 0.06 of its potential returns per unit of risk. Boost Issuer Public is currently generating about -0.01 per unit of risk. If you would invest 3,765 in Leverage Shares 2x on September 4, 2024 and sell it today you would earn a total of 1,472 from holding Leverage Shares 2x or generate 39.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Leverage Shares 2x vs. Boost Issuer Public
Performance |
| Timeline |
| Leverage Shares 2x |
| Boost Issuer Public |
Leverage Shares and Boost Issuer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and Boost Issuer
The main advantage of trading using opposite Leverage Shares and Boost Issuer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, Boost Issuer 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 Boost Issuer will offset losses from the drop in Boost Issuer's long position.| Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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