Correlation Between T Rex and IShares SP
Can any of the company-specific risk be diversified away by investing in both T Rex and IShares SP 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 T Rex and IShares SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Rex 2X Long and iShares SP Mid Cap, you can compare the effects of market volatilities on T Rex and IShares SP 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 T Rex with a short position of IShares SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rex and IShares SP.
Diversification Opportunities for T Rex and IShares SP
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NVDX and IShares is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and iShares SP Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SP Mid and T Rex 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 T Rex 2X Long are associated (or correlated) with IShares SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SP Mid has no effect on the direction of T Rex i.e., T Rex and IShares SP go up and down completely randomly.
Pair Corralation between T Rex and IShares SP
Given the investment horizon of 90 days T Rex is expected to generate 3.21 times less return on investment than IShares SP. In addition to that, T Rex is 3.82 times more volatile than iShares SP Mid Cap. It trades about 0.02 of its total potential returns per unit of risk. iShares SP Mid Cap is currently generating about 0.25 per unit of volatility. If you would invest 12,500 in iShares SP Mid Cap on August 27, 2024 and sell it today you would earn a total of 836.00 from holding iShares SP Mid Cap or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Rex 2X Long vs. iShares SP Mid Cap
Performance |
| Timeline |
| T Rex 2X |
| iShares SP Mid |
T Rex and IShares SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rex and IShares SP
The main advantage of trading using opposite T Rex and IShares SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rex position performs unexpectedly, IShares SP 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 IShares SP will offset losses from the drop in IShares SP's long position.| T Rex vs. Direxion Daily SP | T Rex vs. Direxion Daily Semiconductor | T Rex vs. Direxion Daily Semiconductor |
| IShares SP vs. iShares SP Mid Cap | IShares SP vs. iShares SP Small Cap | IShares SP vs. iShares SP Small Cap | IShares SP vs. iShares SP 500 |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |