Correlation Between Strengthening Dollar and Rising Us
Can any of the company-specific risk be diversified away by investing in both Strengthening Dollar and Rising Us 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 Strengthening Dollar and Rising Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strengthening Dollar 2x and Rising Dollar Profund, you can compare the effects of market volatilities on Strengthening Dollar and Rising Us 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 Strengthening Dollar with a short position of Rising Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strengthening Dollar and Rising Us.
Diversification Opportunities for Strengthening Dollar and Rising Us
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Strengthening and Rising is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Strengthening Dollar 2x and Rising Dollar Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rising Dollar Profund and Strengthening Dollar 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 Strengthening Dollar 2x are associated (or correlated) with Rising Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rising Dollar Profund has no effect on the direction of Strengthening Dollar i.e., Strengthening Dollar and Rising Us go up and down completely randomly.
Pair Corralation between Strengthening Dollar and Rising Us
If you would invest (100.00) in Rising Dollar Profund on March 12, 2024 and sell it today you would earn a total of 100.00 from holding Rising Dollar Profund or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Strengthening Dollar 2x vs. Rising Dollar Profund
Performance |
Timeline |
Strengthening Dollar |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Rising Dollar Profund |
Strengthening Dollar and Rising Us Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Strengthening Dollar and Rising Us
The main advantage of trading using opposite Strengthening Dollar and Rising Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strengthening Dollar position performs unexpectedly, Rising Us 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 Rising Us will offset losses from the drop in Rising Us' long position.Strengthening Dollar vs. Origin Emerging Markets | Strengthening Dollar vs. Investec Emerging Markets | Strengthening Dollar vs. Pnc Emerging Markets | Strengthening Dollar vs. Pace International Emerging |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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