Correlation Between Strategy Shares and SWP Growth

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

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

Diversification Opportunities for Strategy Shares and SWP Growth

0.96

Correlation Coefficient

Strategy Shares  SWP Growth

Almost no diversification

The 3 months correlation between Strategy and SWP is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Strategy Shares and SWP Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWP Growth Income 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 SWP Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWP Growth Income has no effect on the direction of Strategy Shares i.e., Strategy Shares and SWP Growth go up and down completely randomly.

Pair Corralation between Strategy Shares and SWP Growth

Given the investment horizon of 90 days Strategy Shares is expected to generate 3.02 times less return on investment than SWP Growth. But when comparing it to its historical volatility, Strategy Shares is 2.95 times less risky than SWP Growth. It trades about 0.23 of its potential returns per unit of risk. SWP Growth Income is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  2,492  in SWP Growth Income on May 16, 2025 and sell it today you would earn a total of  232.00  from holding SWP Growth Income or generate 9.31% return on investment over 90 days.

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

Strategy Shares  vs.  SWP Growth Income

Strategy Shares

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Strategy Shares are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Strategy Shares is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SWP Growth Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SWP Growth Income are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, SWP Growth may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Strategy Shares and SWP Growth

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

The idea behind Strategy Shares and SWP Growth Income 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.