Correlation Between Exchange Traded and Strategy Shares
Can any of the company-specific risk be diversified away by investing in both Exchange Traded and Strategy Shares 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 Exchange Traded and Strategy Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Traded Concepts and Strategy Shares NewfoundReSolve, you can compare the effects of market volatilities on Exchange Traded and Strategy Shares 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 Exchange Traded with a short position of Strategy Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Traded and Strategy Shares.
Diversification Opportunities for Exchange Traded and Strategy Shares
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exchange and Strategy is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts and Strategy Shares NewfoundReSolv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares Newf and Exchange Traded 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 Exchange Traded Concepts are associated (or correlated) with Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares Newf has no effect on the direction of Exchange Traded i.e., Exchange Traded and Strategy Shares go up and down completely randomly.
Pair Corralation between Exchange Traded and Strategy Shares
Given the investment horizon of 90 days Exchange Traded Concepts is expected to under-perform the Strategy Shares. But the etf apears to be less risky and, when comparing its historical volatility, Exchange Traded Concepts is 1.66 times less risky than Strategy Shares. The etf trades about -0.03 of its potential returns per unit of risk. The Strategy Shares NewfoundReSolve is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,403 in Strategy Shares NewfoundReSolve on August 26, 2024 and sell it today you would earn a total of 822.00 from holding Strategy Shares NewfoundReSolve or generate 34.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.99% |
| Values | Daily Returns |
Exchange Traded Concepts vs. Strategy Shares NewfoundReSolv
Performance |
| Timeline |
| Exchange Traded Concepts |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Strategy Shares Newf |
Exchange Traded and Strategy Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Traded and Strategy Shares
The main advantage of trading using opposite Exchange Traded and Strategy Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Traded position performs unexpectedly, Strategy Shares 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 Strategy Shares will offset losses from the drop in Strategy Shares' long position.| Exchange Traded vs. Cabana Target Leading | Exchange Traded vs. GeneThera | Exchange Traded vs. Cleartronic | Exchange Traded vs. Aquagold International |
| Strategy Shares vs. Cambria Trinity ETF | Strategy Shares vs. Northern Lights | Strategy Shares vs. Cambria Global Momentum | Strategy Shares vs. Alpha Architect Value |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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