Correlation Between DraftKings and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both DraftKings and Nasdaq 100 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 DraftKings and Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DraftKings and Nasdaq 100, you can compare the effects of market volatilities on DraftKings and Nasdaq 100 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 DraftKings with a short position of Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of DraftKings and Nasdaq 100.
Diversification Opportunities for DraftKings and Nasdaq 100
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DraftKings and Nasdaq is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding DraftKings and Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 and DraftKings 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 DraftKings are associated (or correlated) with Nasdaq 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 has no effect on the direction of DraftKings i.e., DraftKings and Nasdaq 100 go up and down completely randomly.
Pair Corralation between DraftKings and Nasdaq 100
Given the investment horizon of 90 days DraftKings is expected to generate 4.83 times more return on investment than Nasdaq 100. However, DraftKings is 4.83 times more volatile than Nasdaq 100. It trades about 0.1 of its potential returns per unit of risk. Nasdaq 100 is currently generating about 0.05 per unit of risk. If you would invest 4,111 in DraftKings on November 27, 2024 and sell it today you would earn a total of 316.00 from holding DraftKings or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
DraftKings vs. Nasdaq 100
Performance |
| Timeline |
| DraftKings |
| Nasdaq 100 |
DraftKings and Nasdaq 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DraftKings and Nasdaq 100
The main advantage of trading using opposite DraftKings and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DraftKings position performs unexpectedly, Nasdaq 100 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 Nasdaq 100 will offset losses from the drop in Nasdaq 100's long position.| DraftKings vs. Light Wonder | DraftKings vs. International Game Technology | DraftKings vs. Everi Holdings | DraftKings vs. PlayAGS |
| Nasdaq 100 vs. Gold Futures | Nasdaq 100 vs. 30 Year Treasury | Nasdaq 100 vs. 10 Year T Note Futures | Nasdaq 100 vs. Micro E mini Russell |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |