Correlation Between T Rex and KraneShares Asia
Can any of the company-specific risk be diversified away by investing in both T Rex and KraneShares Asia 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 KraneShares Asia 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 KraneShares Asia Pacific, you can compare the effects of market volatilities on T Rex and KraneShares Asia 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 KraneShares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rex and KraneShares Asia.
Diversification Opportunities for T Rex and KraneShares Asia
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NVDX and KraneShares is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and KraneShares Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Asia Pacific 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 KraneShares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Asia Pacific has no effect on the direction of T Rex i.e., T Rex and KraneShares Asia go up and down completely randomly.
Pair Corralation between T Rex and KraneShares Asia
Given the investment horizon of 90 days T Rex 2X Long is expected to generate 30.14 times more return on investment than KraneShares Asia. However, T Rex is 30.14 times more volatile than KraneShares Asia Pacific. It trades about 0.14 of its potential returns per unit of risk. KraneShares Asia Pacific is currently generating about 0.23 per unit of risk. If you would invest 297.00 in T Rex 2X Long on September 4, 2024 and sell it today you would earn a total of 1,450 from holding T Rex 2X Long or generate 488.22% 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. KraneShares Asia Pacific
Performance |
| Timeline |
| T Rex 2X |
| KraneShares Asia Pacific |
T Rex and KraneShares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rex and KraneShares Asia
The main advantage of trading using opposite T Rex and KraneShares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rex position performs unexpectedly, KraneShares Asia 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 KraneShares Asia will offset losses from the drop in KraneShares Asia's long position.| T Rex vs. ProShares Ultra SP500 | T Rex vs. ProShares Ultra QQQ | T Rex vs. MicroSectors FANG Index | T Rex vs. ProShares Ultra Financials |
| KraneShares Asia vs. iShares iBoxx Investment | KraneShares Asia vs. iShares iBoxx High | KraneShares Asia vs. iShares National Muni | KraneShares Asia vs. Invesco Emerging Markets |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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