Correlation Between Strategy Shares and AdvisorShares Vice

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

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

Diversification Opportunities for Strategy Shares and AdvisorShares Vice

-0.09

Correlation Coefficient

Strategy Shares  AdvisorShares Vice

Good diversification

The 3 months correlation between Strategy and AdvisorShares is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Strategy Shares and AdvisorShares Vice ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Vice ETF 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 AdvisorShares Vice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Vice ETF has no effect on the direction of Strategy Shares i.e., Strategy Shares and AdvisorShares Vice go up and down completely randomly.

Pair Corralation between Strategy Shares and AdvisorShares Vice

Given the investment horizon of 90 days Strategy Shares is expected to generate 88.64 times more return on investment than AdvisorShares Vice. However, Strategy Shares is 88.64 times more volatile than AdvisorShares Vice ETF. It trades about 0.13 of its potential returns per unit of risk. AdvisorShares Vice ETF is currently generating about -0.03 per unit of risk. If you would invest  0.00  in Strategy Shares on February 11, 2025 and sell it today you would earn a total of  2,456  from holding Strategy Shares or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Strategy Shares  vs.  AdvisorShares Vice ETF

Strategy Shares

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Strategy Shares are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Strategy Shares sustained solid returns over the last few months and may actually be approaching a breakup point.

AdvisorShares Vice ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days AdvisorShares Vice ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, AdvisorShares Vice is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Strategy Shares and AdvisorShares Vice

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

The idea behind Strategy Shares and AdvisorShares Vice ETF 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.