Correlation Between Tradr 2X and Northern Lights
Can any of the company-specific risk be diversified away by investing in both Tradr 2X and Northern Lights 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 Tradr 2X and Northern Lights into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradr 2X Long and Northern Lights, you can compare the effects of market volatilities on Tradr 2X and Northern Lights 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 Tradr 2X with a short position of Northern Lights. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradr 2X and Northern Lights.
Diversification Opportunities for Tradr 2X and Northern Lights
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tradr and Northern is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tradr 2X Long and Northern Lights in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Lights and Tradr 2X 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 Tradr 2X Long are associated (or correlated) with Northern Lights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Lights has no effect on the direction of Tradr 2X i.e., Tradr 2X and Northern Lights go up and down completely randomly.
Pair Corralation between Tradr 2X and Northern Lights
Given the investment horizon of 90 days Tradr 2X Long is expected to generate 2.2 times more return on investment than Northern Lights. However, Tradr 2X is 2.2 times more volatile than Northern Lights. It trades about 0.35 of its potential returns per unit of risk. Northern Lights is currently generating about 0.34 per unit of risk. If you would invest 2,520 in Tradr 2X Long on September 4, 2024 and sell it today you would earn a total of 285.00 from holding Tradr 2X Long or generate 11.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradr 2X Long vs. Northern Lights
Performance |
| Timeline |
| Tradr 2X Long |
| Northern Lights |
Tradr 2X and Northern Lights Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradr 2X and Northern Lights
The main advantage of trading using opposite Tradr 2X and Northern Lights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradr 2X position performs unexpectedly, Northern Lights 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 Northern Lights will offset losses from the drop in Northern Lights' long position.| Tradr 2X vs. ProShares Ultra SP500 | Tradr 2X vs. ProShares Ultra QQQ | Tradr 2X vs. MicroSectors FANG Index | Tradr 2X vs. ProShares Ultra Financials |
| Northern Lights vs. Sterling Capital Focus | Northern Lights vs. Roundhill ETF Trust | Northern Lights vs. Northern Lights | Northern Lights vs. First Trust Exchange Traded |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |