Correlation Between TSJA and IPath Series
Can any of the company-specific risk be diversified away by investing in both TSJA and IPath Series 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 IPath Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TSJA and iPath Series B, you can compare the effects of market volatilities on TSJA and IPath Series 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 IPath Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSJA and IPath Series.
Diversification Opportunities for TSJA and IPath Series
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TSJA and IPath is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding TSJA and iPath Series B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iPath Series B 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 IPath Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iPath Series B has no effect on the direction of TSJA i.e., TSJA and IPath Series go up and down completely randomly.
Pair Corralation between TSJA and IPath Series
If you would invest 4,608 in iPath Series B on September 2, 2024 and sell it today you would lose (349.00) from holding iPath Series B or give up 7.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
TSJA vs. iPath Series B
Performance |
| Timeline |
| TSJA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| iPath Series B |
TSJA and IPath Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TSJA and IPath Series
The main advantage of trading using opposite TSJA and IPath Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TSJA position performs unexpectedly, IPath Series 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 IPath Series will offset losses from the drop in IPath Series' long position.The idea behind TSJA and iPath Series B pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| IPath Series vs. ProShares Ultra VIX | IPath Series vs. ProShares Short VIX | IPath Series vs. ProShares UltraPro Short | IPath Series vs. iShares 20 Year |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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