Correlation Between Trump Media and 29279XAA8

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Can any of the company-specific risk be diversified away by investing in both Trump Media and 29279XAA8 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 Trump Media and 29279XAA8 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trump Media Technology and US29279XAA81, you can compare the effects of market volatilities on Trump Media and 29279XAA8 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 Trump Media with a short position of 29279XAA8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trump Media and 29279XAA8.

Diversification Opportunities for Trump Media and 29279XAA8

-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between Trump and 29279XAA8 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Trump Media Technology and US29279XAA81 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US29279XAA81 and Trump Media 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 Trump Media Technology are associated (or correlated) with 29279XAA8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US29279XAA81 has no effect on the direction of Trump Media i.e., Trump Media and 29279XAA8 go up and down completely randomly.

Pair Corralation between Trump Media and 29279XAA8

Considering the 90-day investment horizon Trump Media Technology is expected to under-perform the 29279XAA8. But the stock apears to be less risky and, when comparing its historical volatility, Trump Media Technology is 1.58 times less risky than 29279XAA8. The stock trades about -0.02 of its potential returns per unit of risk. The US29279XAA81 is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest  5,300  in US29279XAA81 on November 3, 2024 and sell it today you would earn a total of  1,678  from holding US29279XAA81 or generate 31.66% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy30.0%
ValuesDaily Returns

Trump Media Technology  vs.  US29279XAA81

 Performance 
       Timeline  
Trump Media Technology 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Trump Media Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking indicators, Trump Media is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.
US29279XAA81 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in US29279XAA81 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, 29279XAA8 sustained solid returns over the last few months and may actually be approaching a breakup point.

Trump Media and 29279XAA8 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Trump Media and 29279XAA8

The main advantage of trading using opposite Trump Media and 29279XAA8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trump Media position performs unexpectedly, 29279XAA8 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 29279XAA8 will offset losses from the drop in 29279XAA8's long position.
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The idea behind Trump Media Technology and US29279XAA81 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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