Correlation Between Alphabet and Leverage Shares
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By analyzing existing cross correlation between Alphabet Inc Class C and Leverage Shares 3x, you can compare the effects of market volatilities on Alphabet and Leverage 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 Alphabet with a short position of Leverage Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Leverage Shares.
Diversification Opportunities for Alphabet and Leverage Shares
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alphabet and Leverage is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Leverage Shares 3x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leverage Shares 3x and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Leverage Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leverage Shares 3x has no effect on the direction of Alphabet i.e., Alphabet and Leverage Shares go up and down completely randomly.
Pair Corralation between Alphabet and Leverage Shares
Given the investment horizon of 90 days Alphabet is expected to generate 8.84 times less return on investment than Leverage Shares. But when comparing it to its historical volatility, Alphabet Inc Class C is 2.8 times less risky than Leverage Shares. It trades about 0.04 of its potential returns per unit of risk. Leverage Shares 3x is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,659 in Leverage Shares 3x on September 3, 2024 and sell it today you would earn a total of 6,147 from holding Leverage Shares 3x or generate 131.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.65% |
| Values | Daily Returns |
Alphabet Inc Class C vs. Leverage Shares 3x
Performance |
| Timeline |
| Alphabet Class C |
| Leverage Shares 3x |
Alphabet and Leverage Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and Leverage Shares
The main advantage of trading using opposite Alphabet and Leverage Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet position performs unexpectedly, Leverage 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 Leverage Shares will offset losses from the drop in Leverage Shares' long position.The idea behind Alphabet Inc Class C and Leverage Shares 3x 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.| Leverage Shares vs. UBS Fund Solutions | Leverage Shares vs. Xtrackers II | Leverage Shares vs. Xtrackers Nikkei 225 | Leverage Shares vs. iShares VII PLC |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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