Correlation Between REX AI and AdvisorShares Gerber

Can any of the company-specific risk be diversified away by investing in both REX AI and AdvisorShares Gerber 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 REX AI and AdvisorShares Gerber into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between REX AI Equity and AdvisorShares Gerber Kawasaki, you can compare the effects of market volatilities on REX AI and AdvisorShares Gerber 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 REX AI with a short position of AdvisorShares Gerber. Check out your portfolio center. Please also check ongoing floating volatility patterns of REX AI and AdvisorShares Gerber.

Diversification Opportunities for REX AI and AdvisorShares Gerber

0.74

Correlation Coefficient

REX AI  AdvisorShares Gerber

Poor diversification

The 3 months correlation between REX and AdvisorShares is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding REX AI Equity and AdvisorShares Gerber Kawasaki in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Gerber and REX AI 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 REX AI Equity are associated (or correlated) with AdvisorShares Gerber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Gerber has no effect on the direction of REX AI i.e., REX AI and AdvisorShares Gerber go up and down completely randomly.

Pair Corralation between REX AI and AdvisorShares Gerber

Given the investment horizon of 90 days REX AI Equity is expected to generate 1.09 times more return on investment than AdvisorShares Gerber. However, REX AI is 1.09 times more volatile than AdvisorShares Gerber Kawasaki. It trades about 0.09 of its potential returns per unit of risk. AdvisorShares Gerber Kawasaki is currently generating about 0.05 per unit of risk. If you would invest  4,248  in REX AI Equity on October 22, 2024 and sell it today you would earn a total of  763.00  from holding REX AI Equity or generate 17.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	40.41%
Values	Daily Returns

REX AI Equity  vs.  AdvisorShares Gerber Kawasaki

REX AI Equity

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in REX AI Equity are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, REX AI may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AdvisorShares Gerber

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AdvisorShares Gerber Kawasaki are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, AdvisorShares Gerber is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with REX AI and AdvisorShares Gerber

The main advantage of trading using opposite REX AI and AdvisorShares Gerber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REX AI position performs unexpectedly, AdvisorShares Gerber 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 AdvisorShares Gerber will offset losses from the drop in AdvisorShares Gerber's long position.

The idea behind REX AI Equity and AdvisorShares Gerber Kawasaki 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.