Correlation Between T Rex and Invesco BulletShares

Can any of the company-specific risk be diversified away by investing in both T Rex and Invesco BulletShares 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 T Rex and Invesco BulletShares into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between T Rex 2X Long and Invesco BulletShares 2029, you can compare the effects of market volatilities on T Rex and Invesco BulletShares 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 T Rex with a short position of Invesco BulletShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rex and Invesco BulletShares.

Diversification Opportunities for T Rex and Invesco BulletShares

-0.49

Correlation Coefficient

T Rex  Invesco BulletShares

Very good diversification

The 3 months correlation between NVDX and Invesco is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and Invesco BulletShares 2029 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco BulletShares 2029 and T Rex 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 T Rex 2X Long are associated (or correlated) with Invesco BulletShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco BulletShares 2029 has no effect on the direction of T Rex i.e., T Rex and Invesco BulletShares go up and down completely randomly.

Pair Corralation between T Rex and Invesco BulletShares

Given the investment horizon of 90 days T Rex 2X Long is expected to under-perform the Invesco BulletShares. In addition to that, T Rex is 42.29 times more volatile than Invesco BulletShares 2029. It trades about -0.07 of its total potential returns per unit of risk. Invesco BulletShares 2029 is currently generating about -0.05 per unit of volatility. If you would invest  2,280  in Invesco BulletShares 2029 on December 28, 2024 and sell it today you would lose (14.00) from holding Invesco BulletShares 2029 or give up 0.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

T Rex 2X Long  vs.  Invesco BulletShares 2029

T Rex 2X

Risk-Adjusted Performance

Very Weak

Over the last 90 days T Rex 2X Long has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Invesco BulletShares 2029

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco BulletShares 2029 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Invesco BulletShares is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with T Rex and Invesco BulletShares

The main advantage of trading using opposite T Rex and Invesco BulletShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rex position performs unexpectedly, Invesco BulletShares 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 Invesco BulletShares will offset losses from the drop in Invesco BulletShares' long position.

The idea behind T Rex 2X Long and Invesco BulletShares 2029 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.