Correlation Between T Rex and FolioBeyond Rising

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

Diversification Opportunities for T Rex and FolioBeyond Rising

-0.03

Correlation Coefficient

T Rex  FolioBeyond Rising

Good diversification

The 3 months correlation between NVDX and FolioBeyond is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and FolioBeyond Rising Rates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FolioBeyond Rising Rates 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 FolioBeyond Rising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FolioBeyond Rising Rates has no effect on the direction of T Rex i.e., T Rex and FolioBeyond Rising go up and down completely randomly.

Pair Corralation between T Rex and FolioBeyond Rising

Given the investment horizon of 90 days T Rex 2X Long is expected to generate 8.38 times more return on investment than FolioBeyond Rising. However, T Rex is 8.38 times more volatile than FolioBeyond Rising Rates. It trades about 0.13 of its potential returns per unit of risk. FolioBeyond Rising Rates is currently generating about 0.08 per unit of risk. If you would invest  249.00  in T Rex 2X Long on October 8, 2024 and sell it today you would earn a total of  1,484  from holding T Rex 2X Long or generate 595.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	64.35%
Values	Daily Returns

T Rex 2X Long  vs.  FolioBeyond Rising Rates

T Rex 2X

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in T Rex 2X Long are ranked lower than 2 (%) 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.

FolioBeyond Rising Rates

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FolioBeyond Rising Rates are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, FolioBeyond Rising may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with T Rex and FolioBeyond Rising

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

The idea behind T Rex 2X Long and FolioBeyond Rising Rates 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.