Correlation Between T Rex and Strategy Shares
Can any of the company-specific risk be diversified away by investing in both T Rex and Strategy Shares 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 Strategy Shares 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 Strategy Shares NewfoundReSolve, you can compare the effects of market volatilities on T Rex and Strategy 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 T Rex with a short position of Strategy Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rex and Strategy Shares.
Diversification Opportunities for T Rex and Strategy Shares
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NVDX and Strategy is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and Strategy Shares NewfoundReSolv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares Newf 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 Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares Newf has no effect on the direction of T Rex i.e., T Rex and Strategy Shares go up and down completely randomly.
Pair Corralation between T Rex and Strategy Shares
Given the investment horizon of 90 days T Rex 2X Long is expected to generate 7.51 times more return on investment than Strategy Shares. However, T Rex is 7.51 times more volatile than Strategy Shares NewfoundReSolve. It trades about 0.08 of its potential returns per unit of risk. Strategy Shares NewfoundReSolve is currently generating about 0.16 per unit of risk. If you would invest 1,379 in T Rex 2X Long on September 12, 2024 and sell it today you would earn a total of 267.00 from holding T Rex 2X Long or generate 19.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Rex 2X Long vs. Strategy Shares NewfoundReSolv
Performance |
| Timeline |
| T Rex 2X |
| Strategy Shares Newf |
T Rex and Strategy Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rex and Strategy Shares
The main advantage of trading using opposite T Rex and Strategy Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rex position performs unexpectedly, Strategy 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 Strategy Shares will offset losses from the drop in Strategy Shares' long position.| T Rex vs. Freedom Day Dividend | T Rex vs. Franklin Templeton ETF | T Rex vs. iShares MSCI China | T Rex vs. Tidal Trust II |
| Strategy Shares vs. Cambria Trinity ETF | Strategy Shares vs. Northern Lights | Strategy Shares vs. Cambria Global Momentum | Strategy Shares vs. Alpha Architect Value |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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