Correlation Between Spinnaker ETF and Strategy Shares

Can any of the company-specific risk be diversified away by investing in both Spinnaker 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 Spinnaker 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 Spinnaker ETF Series and Strategy Shares Nasdaq, you can compare the effects of market volatilities on Spinnaker 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 Spinnaker ETF with a short position of Strategy Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spinnaker ETF and Strategy Shares.

Diversification Opportunities for Spinnaker ETF and Strategy Shares

0.79

Correlation Coefficient

Spinnaker ETF  Strategy Shares

Poor diversification

The 3 months correlation between Spinnaker and Strategy is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Spinnaker ETF Series 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 Spinnaker 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 Spinnaker ETF Series 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 Spinnaker ETF i.e., Spinnaker ETF and Strategy Shares go up and down completely randomly.

Pair Corralation between Spinnaker ETF and Strategy Shares

Given the investment horizon of 90 days Spinnaker ETF Series is expected to under-perform the Strategy Shares. But the etf apears to be less risky and, when comparing its historical volatility, Spinnaker ETF Series is 1.38 times less risky than Strategy Shares. The etf trades about -0.33 of its potential returns per unit of risk. The Strategy Shares Nasdaq is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest  2,186  in Strategy Shares Nasdaq on September 23, 2024 and sell it today you would lose (49.00) from holding Strategy Shares Nasdaq or give up 2.24% of portfolio value over 90 days.

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

Spinnaker ETF Series  vs.  Strategy Shares Nasdaq

Spinnaker ETF Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spinnaker ETF Series has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Spinnaker ETF is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

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 Spinnaker ETF and Strategy Shares

The main advantage of trading using opposite Spinnaker ETF and Strategy Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spinnaker 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 Spinnaker ETF Series 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.