diversifiable risk of combining US Global and Rational Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global Sea and Rational Inflation Growth, you can compare the effects of market volatilities on US Global and Rational Inflation 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 US Global with a short position of Rational Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and Rational Inflation.
Diversification Opportunities for US Global and Rational Inflation
Pair Corralation between US Global and Rational Inflation
US Global Sea vs. Rational Inflation Growth
US Global and Rational Inflation Volatility Contrast
Pair Trading with US Global and Rational InflationThe main advantage of trading using opposite US Global and Rational Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global position performs unexpectedly, Rational Inflation 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 Rational Inflation will offset losses from the drop in Rational Inflation's long position. The idea behind US Global Sea and Rational Inflation Growth 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.