Correlation Between Mast Global and REX AI

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

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

Diversification Opportunities for Mast Global and REX AI

-0.41

Correlation Coefficient

Mast Global  REX AI

Very good diversification

The 3 months correlation between Mast and REX is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Mast Global Battery and REX AI Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REX AI Equity and Mast Global 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 Mast Global Battery are associated (or correlated) with REX AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REX AI Equity has no effect on the direction of Mast Global i.e., Mast Global and REX AI go up and down completely randomly.

Pair Corralation between Mast Global and REX AI

Allowing for the 90-day total investment horizon Mast Global Battery is expected to under-perform the REX AI. In addition to that, Mast Global is 1.08 times more volatile than REX AI Equity. It trades about -0.01 of its total potential returns per unit of risk. REX AI Equity is currently generating about 0.09 per unit of volatility. If you would invest  4,248  in REX AI Equity on October 4, 2024 and sell it today you would earn a total of  652.00  from holding REX AI Equity or generate 15.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	56.76%
Values	Daily Returns

Mast Global Battery  vs.  REX AI Equity

Mast Global Battery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mast Global Battery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Etf's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

REX AI Equity

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in REX AI Equity are ranked lower than 8 (%) 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.

Pair Trading with Mast Global and REX AI

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

The idea behind Mast Global Battery and REX AI Equity 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.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.