Correlation Between NEOS ETF and Strategy Shares

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

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

Diversification Opportunities for NEOS ETF and Strategy Shares

0.46

Correlation Coefficient

NEOS ETF  Strategy Shares

Very weak diversification

The 3 months correlation between NEOS and Strategy is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding NEOS ETF Trust and Strategy Shares Nasdaq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares Nasdaq and NEOS ETF 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 NEOS ETF Trust are associated (or correlated) with Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares Nasdaq has no effect on the direction of NEOS ETF i.e., NEOS ETF and Strategy Shares go up and down completely randomly.

Pair Corralation between NEOS ETF and Strategy Shares

Given the investment horizon of 90 days NEOS ETF Trust is expected to generate 0.99 times more return on investment than Strategy Shares. However, NEOS ETF Trust is 1.01 times less risky than Strategy Shares. It trades about 0.15 of its potential returns per unit of risk. Strategy Shares Nasdaq is currently generating about -0.18 per unit of risk. If you would invest  2,591  in NEOS ETF Trust on September 22, 2024 and sell it today you would earn a total of  49.00  from holding NEOS ETF Trust or generate 1.89% return on investment over 90 days.

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

NEOS ETF Trust  vs.  Strategy Shares Nasdaq

NEOS ETF Trust

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NEOS ETF Trust are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, NEOS ETF is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Strategy Shares Nasdaq

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strategy Shares Nasdaq has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Strategy Shares is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with NEOS ETF and Strategy Shares

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

The idea behind NEOS ETF Trust and Strategy Shares Nasdaq 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.