Correlation Between Falling Dollar and Short Precious
Can any of the company-specific risk be diversified away by investing in both Falling Dollar and Short Precious 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 Falling Dollar and Short Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falling Dollar Profund and Short Precious Metals, you can compare the effects of market volatilities on Falling Dollar and Short Precious 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 Falling Dollar with a short position of Short Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falling Dollar and Short Precious.
Diversification Opportunities for Falling Dollar and Short Precious
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Falling and Short is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Falling Dollar Profund and Short Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Precious Metals and Falling 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 Falling Dollar Profund are associated (or correlated) with Short Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Precious Metals has no effect on the direction of Falling Dollar i.e., Falling Dollar and Short Precious go up and down completely randomly.
Pair Corralation between Falling Dollar and Short Precious
Assuming the 90 days horizon Falling Dollar Profund is expected to generate 0.2 times more return on investment than Short Precious. However, Falling Dollar Profund is 5.02 times less risky than Short Precious. It trades about 0.04 of its potential returns per unit of risk. Short Precious Metals is currently generating about -0.08 per unit of risk. If you would invest 1,262 in Falling Dollar Profund on April 28, 2025 and sell it today you would earn a total of 13.00 from holding Falling Dollar Profund or generate 1.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Falling Dollar Profund vs. Short Precious Metals
Performance |
Timeline |
Falling Dollar Profund |
Short Precious Metals |
Falling Dollar and Short Precious Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Falling Dollar and Short Precious
The main advantage of trading using opposite Falling Dollar and Short Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falling Dollar position performs unexpectedly, Short Precious 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 Short Precious will offset losses from the drop in Short Precious' long position.Falling Dollar vs. Goehring Rozencwajg Resources | Falling Dollar vs. Pimco Energy Tactical | Falling Dollar vs. Ivy Natural Resources | Falling Dollar vs. Energy Basic Materials |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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