Correlation Between Strategy Shares and TrueShares Structured

Can any of the company-specific risk be diversified away by investing in both Strategy Shares and TrueShares Structured 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 Strategy Shares and TrueShares Structured into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Strategy Shares NewfoundReSolve and TrueShares Structured Outcome, you can compare the effects of market volatilities on Strategy Shares and TrueShares Structured 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 Strategy Shares with a short position of TrueShares Structured. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategy Shares and TrueShares Structured.

Diversification Opportunities for Strategy Shares and TrueShares Structured

1.0

Correlation Coefficient

Strategy Shares  TrueShares Structured

No risk reduction

The 3 months correlation between Strategy and TrueShares is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Strategy Shares NewfoundReSolv and TrueShares Structured Outcome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TrueShares Structured and Strategy Shares 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 Strategy Shares NewfoundReSolve are associated (or correlated) with TrueShares Structured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TrueShares Structured has no effect on the direction of Strategy Shares i.e., Strategy Shares and TrueShares Structured go up and down completely randomly.

Pair Corralation between Strategy Shares and TrueShares Structured

Given the investment horizon of 90 days Strategy Shares NewfoundReSolve is expected to generate 1.21 times more return on investment than TrueShares Structured. However, Strategy Shares is 1.21 times more volatile than TrueShares Structured Outcome. It trades about -0.05 of its potential returns per unit of risk. TrueShares Structured Outcome is currently generating about -0.06 per unit of risk. If you would invest  3,172  in Strategy Shares NewfoundReSolve on December 28, 2024 and sell it today you would lose (85.00) from holding Strategy Shares NewfoundReSolve or give up 2.68% of portfolio value over 90 days.

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

Strategy Shares NewfoundReSolv  vs.  TrueShares Structured Outcome

Strategy Shares Newf

Risk-Adjusted Performance

Very Weak

Over the last 90 days Strategy Shares NewfoundReSolve has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Strategy Shares is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

TrueShares Structured

Risk-Adjusted Performance

Very Weak

Over the last 90 days TrueShares Structured Outcome has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, TrueShares Structured is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Strategy Shares and TrueShares Structured

The main advantage of trading using opposite Strategy Shares and TrueShares Structured positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategy Shares position performs unexpectedly, TrueShares Structured 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 TrueShares Structured will offset losses from the drop in TrueShares Structured's long position.

The idea behind Strategy Shares NewfoundReSolve and TrueShares Structured Outcome 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.