Correlation Between Strategy Shares and Day HaganNed

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

By analyzing existing cross correlation between Strategy Shares and Day HaganNed Davis, you can compare the effects of market volatilities on Strategy Shares and Day HaganNed 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 Day HaganNed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategy Shares and Day HaganNed.

Diversification Opportunities for Strategy Shares and Day HaganNed

0.59

Correlation Coefficient

Strategy Shares  Day HaganNed

Very weak diversification

The 3 months correlation between Strategy and Day is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Strategy Shares and Day HaganNed Davis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Day HaganNed Davis 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 are associated (or correlated) with Day HaganNed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Day HaganNed Davis has no effect on the direction of Strategy Shares i.e., Strategy Shares and Day HaganNed go up and down completely randomly.

Pair Corralation between Strategy Shares and Day HaganNed

Given the investment horizon of 90 days Strategy Shares is not expected to generate positive returns. However, Strategy Shares is 1.89 times less risky than Day HaganNed. It waists most of its returns potential to compensate for thr risk taken. Day HaganNed is generating about -0.07 per unit of risk. If you would invest  2,132  in Strategy Shares on December 1, 2024 and sell it today you would lose (1.00) from holding Strategy Shares or give up 0.05% of portfolio value over 90 days.

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

Strategy Shares   vs.  Day HaganNed Davis

Strategy Shares

Risk-Adjusted Performance

Very Weak

Over the last 90 days Strategy Shares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Strategy Shares is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Day HaganNed Davis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Day HaganNed Davis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Day HaganNed is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Strategy Shares and Day HaganNed

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

The idea behind Strategy Shares and Day HaganNed Davis 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.