Correlation Between IPath Series and TSJA
Can any of the company-specific risk be diversified away by investing in both IPath Series and TSJA 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 IPath Series and TSJA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iPath Series B and TSJA, you can compare the effects of market volatilities on IPath Series and TSJA 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 IPath Series with a short position of TSJA. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPath Series and TSJA.
Diversification Opportunities for IPath Series and TSJA
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between IPath and TSJA is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding iPath Series B and TSJA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSJA and IPath Series 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 iPath Series B are associated (or correlated) with TSJA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSJA has no effect on the direction of IPath Series i.e., IPath Series and TSJA go up and down completely randomly.
Pair Corralation between IPath Series and TSJA
Considering the 90-day investment horizon iPath Series B is expected to under-perform the TSJA. In addition to that, IPath Series is 5.82 times more volatile than TSJA. It trades about -0.06 of its total potential returns per unit of risk. TSJA is currently generating about 0.12 per unit of volatility. If you would invest 2,441 in TSJA on August 27, 2024 and sell it today you would earn a total of 332.00 from holding TSJA or generate 13.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.85% |
| Values | Daily Returns |
iPath Series B vs. TSJA
Performance |
| Timeline |
| iPath Series B |
| TSJA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IPath Series and TSJA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPath Series and TSJA
The main advantage of trading using opposite IPath Series and TSJA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPath Series position performs unexpectedly, TSJA 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 TSJA will offset losses from the drop in TSJA's long position.| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |