Correlation Between T Rex and Schwab Long

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

Diversification Opportunities for T Rex and Schwab Long

-0.77

Correlation Coefficient

T Rex  Schwab Long

Pay attention - limited upside

The 3 months correlation between NVDX and Schwab is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and Schwab Long Term Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab Long Term 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 Schwab Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab Long Term has no effect on the direction of T Rex i.e., T Rex and Schwab Long go up and down completely randomly.

Pair Corralation between T Rex and Schwab Long

Given the investment horizon of 90 days T Rex 2X Long is expected to under-perform the Schwab Long. In addition to that, T Rex is 11.74 times more volatile than Schwab Long Term Treasury. It trades about -0.07 of its total potential returns per unit of risk. Schwab Long Term Treasury is currently generating about 0.06 per unit of volatility. If you would invest  3,137  in Schwab Long Term Treasury on December 28, 2024 and sell it today you would earn a total of  78.00  from holding Schwab Long Term Treasury or generate 2.49% return on investment over 90 days.

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

T Rex 2X Long  vs.  Schwab Long Term Treasury

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.

Schwab Long Term

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Schwab Long Term Treasury are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical indicators, Schwab Long is not utilizing all of its potentials. The new stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with T Rex and Schwab Long

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

The idea behind T Rex 2X Long and Schwab Long Term Treasury 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 Transaction History module to view history of all your transactions and understand their impact on performance.