Correlation Between TSJA and 1x Short
Can any of the company-specific risk be diversified away by investing in both TSJA and 1x Short 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 TSJA and 1x Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TSJA and 1x Short VIX, you can compare the effects of market volatilities on TSJA and 1x Short 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 TSJA with a short position of 1x Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSJA and 1x Short.
Diversification Opportunities for TSJA and 1x Short
Good diversification
The 3 months correlation between TSJA and SVIX is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding TSJA and 1x Short VIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1x Short VIX and TSJA 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 TSJA are associated (or correlated) with 1x Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1x Short VIX has no effect on the direction of TSJA i.e., TSJA and 1x Short go up and down completely randomly.
Pair Corralation between TSJA and 1x Short
If you would invest 2,429 in 1x Short VIX on August 31, 2024 and sell it today you would earn a total of 458.00 from holding 1x Short VIX or generate 18.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
TSJA vs. 1x Short VIX
Performance |
| Timeline |
| TSJA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| 1x Short VIX |
TSJA and 1x Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TSJA and 1x Short
The main advantage of trading using opposite TSJA and 1x Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TSJA position performs unexpectedly, 1x Short 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 1x Short will offset losses from the drop in 1x Short's long position.| TSJA vs. ProShares VIX Mid Term | TSJA vs. ProShares VIX Short Term | TSJA vs. iPath Series B | TSJA vs. ProShares Short VIX |
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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