Correlation Between T Rex and 2x Long
Can any of the company-specific risk be diversified away by investing in both T Rex and 2x Long 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 2x Long 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 2x Long VIX, you can compare the effects of market volatilities on T Rex and 2x Long 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 2x Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rex and 2x Long.
Diversification Opportunities for T Rex and 2x Long
Very good diversification
The 3 months correlation between NVDX and UVIX is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and 2x Long VIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2x Long VIX 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 2x Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2x Long VIX has no effect on the direction of T Rex i.e., T Rex and 2x Long go up and down completely randomly.
Pair Corralation between T Rex and 2x Long
Given the investment horizon of 90 days T Rex 2X Long is expected to generate 0.75 times more return on investment than 2x Long. However, T Rex 2X Long is 1.33 times less risky than 2x Long. It trades about 0.14 of its potential returns per unit of risk. 2x Long VIX is currently generating about -0.07 per unit of risk. If you would invest 249.00 in T Rex 2X Long on September 2, 2024 and sell it today you would earn a total of 1,493 from holding T Rex 2X Long or generate 599.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 56.85% |
| Values | Daily Returns |
T Rex 2X Long vs. 2x Long VIX
Performance |
| Timeline |
| T Rex 2X |
| 2x Long VIX |
T Rex and 2x Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rex and 2x Long
The main advantage of trading using opposite T Rex and 2x Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rex position performs unexpectedly, 2x Long 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 2x Long will offset losses from the drop in 2x Long'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 |
| 2x Long vs. 1x Short VIX | 2x Long vs. ProShares UltraShort Bloomberg | 2x Long vs. MicroSectors FANG Index | 2x Long vs. AXS TSLA Bear |
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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