Correlation Between Financial Services and Europe 125x
Can any of the company-specific risk be diversified away by investing in both Financial Services and Europe 125x 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 Financial Services and Europe 125x into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial Services Fund and Europe 125x Strategy, you can compare the effects of market volatilities on Financial Services and Europe 125x 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 Financial Services with a short position of Europe 125x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial Services and Europe 125x.
Diversification Opportunities for Financial Services and Europe 125x
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Financial and Europe is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Financial Services Fund and Europe 125x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europe 125x Strategy and Financial Services 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 Financial Services Fund are associated (or correlated) with Europe 125x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europe 125x Strategy has no effect on the direction of Financial Services i.e., Financial Services and Europe 125x go up and down completely randomly.
Pair Corralation between Financial Services and Europe 125x
Assuming the 90 days horizon Financial Services Fund is expected to generate 1.2 times more return on investment than Europe 125x. However, Financial Services is 1.2 times more volatile than Europe 125x Strategy. It trades about 0.28 of its potential returns per unit of risk. Europe 125x Strategy is currently generating about -0.36 per unit of risk. If you would invest 9,664 in Financial Services Fund on August 27, 2024 and sell it today you would earn a total of 743.00 from holding Financial Services Fund or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financial Services Fund vs. Europe 125x Strategy
Performance |
| Timeline |
| Financial Services |
| Europe 125x Strategy |
Financial Services and Europe 125x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial Services and Europe 125x
The main advantage of trading using opposite Financial Services and Europe 125x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial Services position performs unexpectedly, Europe 125x 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 Europe 125x will offset losses from the drop in Europe 125x's long position.| Financial Services vs. Health Care Fund | Financial Services vs. Banking Fund Investor | Financial Services vs. Technology Fund Investor | Financial Services vs. Transportation Fund Investor |
| Europe 125x vs. Sp 500 2x | Europe 125x vs. Inverse Dow 2x | Europe 125x vs. Nasdaq 100 2x Strategy | Europe 125x vs. Russell 2000 2x |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |