Correlation Between T Rex and AB Active

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

Diversification Opportunities for T Rex and AB Active

-0.45

Correlation Coefficient

T Rex  AB Active

Very good diversification

The 3 months correlation between NVDX and SDFI is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and AB Active ETFs, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB Active ETFs, 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 AB Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB Active ETFs, has no effect on the direction of T Rex i.e., T Rex and AB Active go up and down completely randomly.

Pair Corralation between T Rex and AB Active

Given the investment horizon of 90 days T Rex 2X Long is expected to generate 30.46 times more return on investment than AB Active. However, T Rex is 30.46 times more volatile than AB Active ETFs,. It trades about 0.07 of its potential returns per unit of risk. AB Active ETFs, is currently generating about 0.06 per unit of risk. If you would invest  1,416  in T Rex 2X Long on August 30, 2024 and sell it today you would earn a total of  254.00  from holding T Rex 2X Long or generate 17.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

T Rex 2X Long  vs.  AB Active ETFs,

T Rex 2X

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in T Rex 2X Long are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, T Rex showed solid returns over the last few months and may actually be approaching a breakup point.

AB Active ETFs,

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AB Active ETFs, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, AB Active is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with T Rex and AB Active

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

The idea behind T Rex 2X Long and AB Active ETFs, 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.