Correlation Between Strategy Shares and MicroSectors FANG
Can any of the company-specific risk be diversified away by investing in both Strategy Shares and MicroSectors FANG 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 MicroSectors FANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategy Shares and MicroSectors FANG ETN, you can compare the effects of market volatilities on Strategy Shares and MicroSectors FANG 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 MicroSectors FANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategy Shares and MicroSectors FANG.
Diversification Opportunities for Strategy Shares and MicroSectors FANG
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Strategy and MicroSectors is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Strategy Shares and MicroSectors FANG ETN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors FANG ETN 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 MicroSectors FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors FANG ETN has no effect on the direction of Strategy Shares i.e., Strategy Shares and MicroSectors FANG go up and down completely randomly.
Pair Corralation between Strategy Shares and MicroSectors FANG
Given the investment horizon of 90 days Strategy Shares is expected to generate 4.79 times less return on investment than MicroSectors FANG. But when comparing it to its historical volatility, Strategy Shares is 2.21 times less risky than MicroSectors FANG. It trades about 0.15 of its potential returns per unit of risk. MicroSectors FANG ETN is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 4,870 in MicroSectors FANG ETN on April 16, 2025 and sell it today you would earn a total of 1,616 from holding MicroSectors FANG ETN or generate 33.18% 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. MicroSectors FANG ETN
Performance |
| Timeline |
| Strategy Shares |
| MicroSectors FANG ETN |
Strategy Shares and MicroSectors FANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategy Shares and MicroSectors FANG
The main advantage of trading using opposite Strategy Shares and MicroSectors FANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategy Shares position performs unexpectedly, MicroSectors FANG 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 MicroSectors FANG will offset losses from the drop in MicroSectors FANG's long position.| Strategy Shares vs. Freedom Day Dividend | Strategy Shares vs. Davis Select International | Strategy Shares vs. iShares MSCI China | Strategy Shares vs. SmartETFs Dividend Builder |
| MicroSectors FANG vs. Franklin Templeton ETF | MicroSectors FANG vs. Tidal Trust II | MicroSectors FANG vs. Tidal Trust II | MicroSectors FANG vs. iShares Dividend and |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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