Correlation Between T Rex and Dimensional Global

Can any of the company-specific risk be diversified away by investing in both T Rex and Dimensional Global 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 Dimensional Global 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 Dimensional Global Core, you can compare the effects of market volatilities on T Rex and Dimensional Global 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 Dimensional Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rex and Dimensional Global.

Diversification Opportunities for T Rex and Dimensional Global

-0.25

Correlation Coefficient

T Rex  Dimensional Global

Very good diversification

The 3 months correlation between NVDX and Dimensional is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and Dimensional Global Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional Global Core 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 Dimensional Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional Global Core has no effect on the direction of T Rex i.e., T Rex and Dimensional Global go up and down completely randomly.

Pair Corralation between T Rex and Dimensional Global

Given the investment horizon of 90 days T Rex 2X Long is expected to generate 19.17 times more return on investment than Dimensional Global. However, T Rex is 19.17 times more volatile than Dimensional Global Core. It trades about 0.13 of its potential returns per unit of risk. Dimensional Global Core is currently generating about 0.08 per unit of risk. If you would invest  249.00  in T Rex 2X Long on October 6, 2024 and sell it today you would earn a total of  1,373  from holding T Rex 2X Long or generate 551.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.05%
Values	Daily Returns

T Rex 2X Long  vs.  Dimensional Global Core

T Rex 2X

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in T Rex 2X Long are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, T Rex may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Dimensional Global Core

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dimensional Global Core has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Dimensional Global is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with T Rex and Dimensional Global

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

The idea behind T Rex 2X Long and Dimensional Global Core 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.