Correlation Between Oil Gas and Ultra Nasdaq-100
Can any of the company-specific risk be diversified away by investing in both Oil Gas and Ultra 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 Oil Gas and Ultra Nasdaq-100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Gas Ultrasector and Ultra Nasdaq 100 Profunds, you can compare the effects of market volatilities on Oil Gas and Ultra 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 Oil Gas with a short position of Ultra Nasdaq-100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Gas and Ultra Nasdaq-100.
Diversification Opportunities for Oil Gas and Ultra Nasdaq-100
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oil and Ultra is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector and Ultra Nasdaq 100 Profunds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Nasdaq 100 and Oil Gas 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 Oil Gas Ultrasector are associated (or correlated) with Ultra 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 Ultra Nasdaq 100 has no effect on the direction of Oil Gas i.e., Oil Gas and Ultra Nasdaq-100 go up and down completely randomly.
Pair Corralation between Oil Gas and Ultra Nasdaq-100
Assuming the 90 days horizon Oil Gas Ultrasector is expected to generate 0.73 times more return on investment than Ultra Nasdaq-100. However, Oil Gas Ultrasector is 1.38 times less risky than Ultra Nasdaq-100. It trades about 0.24 of its potential returns per unit of risk. Ultra Nasdaq 100 Profunds is currently generating about 0.13 per unit of risk. If you would invest 3,685 in Oil Gas Ultrasector on August 24, 2024 and sell it today you would earn a total of 328.00 from holding Oil Gas Ultrasector or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil Gas Ultrasector vs. Ultra Nasdaq 100 Profunds
Performance |
| Timeline |
| Oil Gas Ultrasector |
| Ultra Nasdaq 100 |
Oil Gas and Ultra Nasdaq-100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Gas and Ultra Nasdaq-100
The main advantage of trading using opposite Oil Gas and Ultra Nasdaq-100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Gas position performs unexpectedly, Ultra 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 Ultra Nasdaq-100 will offset losses from the drop in Ultra Nasdaq-100's long position.| Oil Gas vs. Nasdaq 100 2x Strategy | Oil Gas vs. Nasdaq 100 2x Strategy | Oil Gas vs. Nasdaq 100 2x Strategy | Oil Gas vs. Ultra Nasdaq 100 Profunds |
| Ultra Nasdaq-100 vs. Nasdaq 100 2x Strategy | Ultra Nasdaq-100 vs. Nasdaq 100 2x Strategy | Ultra Nasdaq-100 vs. Nasdaq 100 2x Strategy | Ultra Nasdaq-100 vs. Ultranasdaq 100 Profund Ultranasdaq 100 |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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