Correlation Between Volatility Shares and Flaherty
Can any of the company-specific risk be diversified away by investing in both Volatility Shares and Flaherty 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 Volatility Shares and Flaherty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volatility Shares Trust and Flaherty and Crumrine, you can compare the effects of market volatilities on Volatility Shares and Flaherty 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 Volatility Shares with a short position of Flaherty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volatility Shares and Flaherty.
Diversification Opportunities for Volatility Shares and Flaherty
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Volatility and Flaherty is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Volatility Shares Trust and Flaherty and Crumrine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flaherty and Crumrine and Volatility 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 Volatility Shares Trust are associated (or correlated) with Flaherty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flaherty and Crumrine has no effect on the direction of Volatility Shares i.e., Volatility Shares and Flaherty go up and down completely randomly.
Pair Corralation between Volatility Shares and Flaherty
Given the investment horizon of 90 days Volatility Shares Trust is expected to generate 13.85 times more return on investment than Flaherty. However, Volatility Shares is 13.85 times more volatile than Flaherty and Crumrine. It trades about 0.39 of its potential returns per unit of risk. Flaherty and Crumrine is currently generating about 0.17 per unit of risk. If you would invest 3,194 in Volatility Shares Trust on September 2, 2024 and sell it today you would earn a total of 2,826 from holding Volatility Shares Trust or generate 88.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volatility Shares Trust vs. Flaherty and Crumrine
Performance |
| Timeline |
| Volatility Shares Trust |
| Flaherty and Crumrine |
Volatility Shares and Flaherty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volatility Shares and Flaherty
The main advantage of trading using opposite Volatility Shares and Flaherty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volatility Shares position performs unexpectedly, Flaherty 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 Flaherty will offset losses from the drop in Flaherty's long position.| Volatility Shares vs. ProShares Trust | Volatility Shares vs. iShares Ethereum Trust | Volatility Shares vs. ProShares Trust | Volatility Shares vs. Grayscale Ethereum Trust |
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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 the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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