Correlation Between T Rex and RBB Fund
Can any of the company-specific risk be diversified away by investing in both T Rex and RBB Fund 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 RBB Fund 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 The RBB Fund, you can compare the effects of market volatilities on T Rex and RBB Fund 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 RBB Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rex and RBB Fund.
Diversification Opportunities for T Rex and RBB Fund
Poor diversification
The 3 months correlation between NVDX and RBB is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and The RBB Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBB Fund 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 RBB Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBB Fund has no effect on the direction of T Rex i.e., T Rex and RBB Fund go up and down completely randomly.
Pair Corralation between T Rex and RBB Fund
Given the investment horizon of 90 days T Rex 2X Long is expected to generate 7.79 times more return on investment than RBB Fund. However, T Rex is 7.79 times more volatile than The RBB Fund. It trades about 0.05 of its potential returns per unit of risk. The RBB Fund is currently generating about 0.22 per unit of risk. If you would invest 1,509 in T Rex 2X Long on September 1, 2024 and sell it today you would earn a total of 233.00 from holding T Rex 2X Long or generate 15.44% 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. The RBB Fund
Performance |
| Timeline |
| T Rex 2X |
| RBB Fund |
T Rex and RBB Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rex and RBB Fund
The main advantage of trading using opposite T Rex and RBB Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rex position performs unexpectedly, RBB Fund 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 RBB Fund will offset losses from the drop in RBB Fund's long position.| T Rex vs. Tidal Trust II | T Rex vs. Tidal Trust II | T Rex vs. Direxion Daily META | T Rex vs. Direxion Daily META |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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