Correlation Between Astar and T REX
Can any of the company-specific risk be diversified away by investing in both Astar and T REX 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 Astar and T REX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and T REX 2X Long, you can compare the effects of market volatilities on Astar and T REX 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 Astar with a short position of T REX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and T REX.
Diversification Opportunities for Astar and T REX
Very good diversification
The 3 months correlation between Astar and TSLT is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Astar and T REX 2X Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T REX 2X and Astar 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 Astar are associated (or correlated) with T REX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T REX 2X has no effect on the direction of Astar i.e., Astar and T REX go up and down completely randomly.
Pair Corralation between Astar and T REX
Assuming the 90 days trading horizon Astar is expected to generate 4.23 times less return on investment than T REX. In addition to that, Astar is 1.1 times more volatile than T REX 2X Long. It trades about 0.01 of its total potential returns per unit of risk. T REX 2X Long is currently generating about 0.06 per unit of volatility. If you would invest 2,046 in T REX 2X Long on November 2, 2024 and sell it today you would earn a total of 1,543 from holding T REX 2X Long or generate 75.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.55% |
| Values | Daily Returns |
Astar vs. T REX 2X Long
Performance |
| Timeline |
| Astar |
| T REX 2X |
Astar and T REX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and T REX
The main advantage of trading using opposite Astar and T REX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, T REX 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 T REX will offset losses from the drop in T REX's long position.The idea behind Astar and T REX 2X Long 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.| T REX vs. Tidal Trust II | T REX vs. Tidal Trust II | T REX vs. Direxion Daily META | T REX vs. Direxion Daily META |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |