Correlation Between STF Tactical and Cabana Target
Can any of the company-specific risk be diversified away by investing in both STF Tactical and Cabana Target 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 STF Tactical and Cabana Target into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STF Tactical Growth and Cabana Target Leading, you can compare the effects of market volatilities on STF Tactical and Cabana Target 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 STF Tactical with a short position of Cabana Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of STF Tactical and Cabana Target.
Diversification Opportunities for STF Tactical and Cabana Target
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between STF and Cabana is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding STF Tactical Growth and Cabana Target Leading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabana Target Leading and STF Tactical 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 STF Tactical Growth are associated (or correlated) with Cabana Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabana Target Leading has no effect on the direction of STF Tactical i.e., STF Tactical and Cabana Target go up and down completely randomly.
Pair Corralation between STF Tactical and Cabana Target
Considering the 90-day investment horizon STF Tactical is expected to generate 1.91 times less return on investment than Cabana Target. In addition to that, STF Tactical is 1.56 times more volatile than Cabana Target Leading. It trades about 0.05 of its total potential returns per unit of risk. Cabana Target Leading is currently generating about 0.14 per unit of volatility. If you would invest 2,128 in Cabana Target Leading on August 30, 2024 and sell it today you would earn a total of 49.00 from holding Cabana Target Leading or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
STF Tactical Growth vs. Cabana Target Leading
Performance |
| Timeline |
| STF Tactical Growth |
| Cabana Target Leading |
STF Tactical and Cabana Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STF Tactical and Cabana Target
The main advantage of trading using opposite STF Tactical and Cabana Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STF Tactical position performs unexpectedly, Cabana Target 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 Cabana Target will offset losses from the drop in Cabana Target's long position.| STF Tactical vs. iShares Core Growth | STF Tactical vs. Alpha Architect Gdsdn | STF Tactical vs. VanEck Inflation Allocation | STF Tactical vs. ClearShares OCIO ETF |
| Cabana Target vs. iShares Core Growth | Cabana Target vs. Alpha Architect Gdsdn | Cabana Target vs. STF Tactical Growth | Cabana Target vs. VanEck Inflation Allocation |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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