Correlation Between Strategy Shares and ALPS Clean

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

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

Diversification Opportunities for Strategy Shares and ALPS Clean

0.35

Correlation Coefficient

Strategy Shares  ALPS Clean

Weak diversification

The 3 months correlation between Strategy and ALPS is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Strategy Shares and ALPS Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALPS Clean Energy 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 ALPS Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALPS Clean Energy has no effect on the direction of Strategy Shares i.e., Strategy Shares and ALPS Clean go up and down completely randomly.

Pair Corralation between Strategy Shares and ALPS Clean

Given the investment horizon of 90 days Strategy Shares is expected to generate 8.55 times less return on investment than ALPS Clean. But when comparing it to its historical volatility, Strategy Shares is 9.21 times less risky than ALPS Clean. It trades about 0.1 of its potential returns per unit of risk. ALPS Clean Energy is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,929  in ALPS Clean Energy on September 12, 2025 and sell it today you would earn a total of  378.00  from holding ALPS Clean Energy or generate 12.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Strategy Shares  vs.  ALPS Clean Energy

Strategy Shares

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Strategy Shares are ranked lower than 8 (%) 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.

ALPS Clean Energy

Risk-Adjusted Performance

Fair

Over the last 90 days ALPS Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak technical and fundamental indicators, ALPS Clean unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Strategy Shares and ALPS Clean

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

The idea behind Strategy Shares and ALPS Clean Energy 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.