Correlation Between Strats SM and NYSE LISTED

Can any of the company-specific risk be diversified away by investing in both Strats SM and NYSE LISTED 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 Strats SM and NYSE LISTED into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Strats SM Trust and NYSE LISTED TEST, you can compare the effects of market volatilities on Strats SM and NYSE LISTED 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 Strats SM with a short position of NYSE LISTED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strats SM and NYSE LISTED.

Diversification Opportunities for Strats SM and NYSE LISTED

0.0

Correlation Coefficient

Strats SM  NYSE LISTED

Pay attention - limited upside

The 3 months correlation between Strats and NYSE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Strats SM Trust and NYSE LISTED TEST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE LISTED TEST and Strats SM 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 Strats SM Trust are associated (or correlated) with NYSE LISTED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE LISTED TEST has no effect on the direction of Strats SM i.e., Strats SM and NYSE LISTED go up and down completely randomly.

Pair Corralation between Strats SM and NYSE LISTED

If you would invest  2,455  in Strats SM Trust on September 17, 2024 and sell it today you would earn a total of  32.00  from holding Strats SM Trust or generate 1.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Strats SM Trust  vs.  NYSE LISTED TEST

Strats SM Trust

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Strats SM Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward-looking indicators, Strats SM is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

NYSE LISTED TEST

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NYSE LISTED TEST has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, NYSE LISTED is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Strats SM and NYSE LISTED

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

The idea behind Strats SM Trust and NYSE LISTED TEST 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.