TWO Forecast + Trading Strategies



Bearish<—>Bullish



80% Confidence




Bullish Case: Positive exposure to interest rate changes and the successful diversification of assets bolster potential gains. The historical return surface shows promising areas for bullish potential.




Bearish Case: High implied volatility and uncertainty in the market create risk for further declines, particularly with ongoing challenges in spread management.




Potential Outcomes: Potential outcomes include a mild recovery in price due to undervaluation (40%), flat performance amid economic stress (30%), or further decline from volatility (30%).




Trading Oracle:
Exploit high volatility by using the Bearish Long Volatility strategy. This utilizes buying OOTM put options to capture potential downward moves while managing risk. With the market uncertainty reflected in the implied volatility surfaces, this strategy aligns with the current economic landscape.



April 15, 2025


Two Harbors Investment Forecast

TWO        Two Harbors Investment











Correlated Assets

Assets that tend to move strongly with TWO



AZN Forecast + Options Trading Strategies   AZN  Astrazeneca (0.73)


ARR Forecast + Options Trading Strategies   ARR  ARMOUR Residential REIT (0.73)


AMGN Forecast + Options Trading Strategies   AMGN  AMGEN (0.65)


SHEL Forecast + Options Trading Strategies   SHEL  Shell Plc - ADR (Representing) (0.62)


UDN Forecast + Options Trading Strategies   UDN  Invesco DB US Dollar Index Bearish (0.61)



Uncorrelated Assets

Assets with little price relationship to TWO



SEE Forecast + Options Trading Strategies   SEE  Sealed Air (0.0)


DNUT Forecast + Options Trading Strategies   DNUT  Krispy Kreme (0.01)


MEOH Forecast + Options Trading Strategies   MEOH  Methanex (0.01)


MREO Forecast + Options Trading Strategies   MREO  Mereo Biopharma Group Plc (-0.01)


BB Forecast + Options Trading Strategies   BB  BlackBerry (-0.01)



Anticorrelated Assets

Assets that tend to move strongly against TWO



NOW Forecast + Options Trading Strategies   NOW  ServiceNow (-0.56)


FLR Forecast + Options Trading Strategies   FLR  Fluor (-0.56)


CAT Forecast + Options Trading Strategies   CAT  Caterpillar (-0.59)


HRI Forecast + Options Trading Strategies   HRI  Herc (-0.65)


POWL Forecast + Options Trading Strategies   POWL  Powell Industries (-0.66)









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