Correlation Between SPACE and Trueshares Structured
Can any of the company-specific risk be diversified away by investing in both SPACE and Trueshares Structured 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 SPACE and Trueshares Structured into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPACE and Trueshares Structured Outcome, you can compare the effects of market volatilities on SPACE and Trueshares Structured 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 SPACE with a short position of Trueshares Structured. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPACE and Trueshares Structured.
Diversification Opportunities for SPACE and Trueshares Structured
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPACE and Trueshares is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SPACE and Trueshares Structured Outcome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trueshares Structured and SPACE 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 SPACE are associated (or correlated) with Trueshares Structured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trueshares Structured has no effect on the direction of SPACE i.e., SPACE and Trueshares Structured go up and down completely randomly.
Pair Corralation between SPACE and Trueshares Structured
Assuming the 90 days horizon SPACE is expected to generate 8.34 times more return on investment than Trueshares Structured. However, SPACE is 8.34 times more volatile than Trueshares Structured Outcome. It trades about 0.25 of its potential returns per unit of risk. Trueshares Structured Outcome is currently generating about 0.16 per unit of risk. If you would invest 43.00 in SPACE on August 30, 2024 and sell it today you would earn a total of 13.00 from holding SPACE or generate 30.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
SPACE vs. Trueshares Structured Outcome
Performance |
| Timeline |
| SPACE |
| Trueshares Structured |
SPACE and Trueshares Structured Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPACE and Trueshares Structured
The main advantage of trading using opposite SPACE and Trueshares Structured positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPACE position performs unexpectedly, Trueshares Structured 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 Trueshares Structured will offset losses from the drop in Trueshares Structured's long position.The idea behind SPACE and Trueshares Structured Outcome 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.| Trueshares Structured vs. FT Vest Equity | Trueshares Structured vs. Northern Lights | Trueshares Structured vs. Dimensional International High | Trueshares Structured vs. First Trust Exchange Traded |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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