Correlation Between REX FANG and IShares Dividend

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

By analyzing existing cross correlation between REX FANG Innovation and iShares Dividend and, you can compare the effects of market volatilities on REX FANG and IShares Dividend 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 FANG with a short position of IShares Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of REX FANG and IShares Dividend.

Diversification Opportunities for REX FANG and IShares Dividend

0.32

Correlation Coefficient

REX FANG  IShares Dividend

Weak diversification

The 3 months correlation between REX and IShares is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding REX FANG Innovation and iShares Dividend and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Dividend and REX FANG 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 FANG Innovation are associated (or correlated) with IShares Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Dividend has no effect on the direction of REX FANG i.e., REX FANG and IShares Dividend go up and down completely randomly.

Pair Corralation between REX FANG and IShares Dividend

Given the investment horizon of 90 days REX FANG Innovation is expected to generate 1.3 times more return on investment than IShares Dividend. However, REX FANG is 1.3 times more volatile than iShares Dividend and. It trades about 0.06 of its potential returns per unit of risk. iShares Dividend and is currently generating about 0.03 per unit of risk. If you would invest  4,908  in REX FANG Innovation on October 26, 2024 and sell it today you would earn a total of  165.00  from holding REX FANG Innovation or generate 3.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

REX FANG Innovation  vs.  iShares Dividend and

REX FANG Innovation

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in REX FANG Innovation are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, REX FANG is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

iShares Dividend

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Dividend and are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, IShares Dividend is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with REX FANG and IShares Dividend

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

The idea behind REX FANG Innovation and iShares Dividend and 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.