Correlation Between Forstrong Global and BetaPro NASDAQ
Can any of the company-specific risk be diversified away by investing in both Forstrong Global and BetaPro NASDAQ 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 Forstrong Global and BetaPro NASDAQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forstrong Global Income and BetaPro NASDAQ 100 2x, you can compare the effects of market volatilities on Forstrong Global and BetaPro NASDAQ 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 Forstrong Global with a short position of BetaPro NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forstrong Global and BetaPro NASDAQ.
Diversification Opportunities for Forstrong Global and BetaPro NASDAQ
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Forstrong and BetaPro is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Forstrong Global Income and BetaPro NASDAQ 100 2x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro NASDAQ 100 and Forstrong Global 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 Forstrong Global Income are associated (or correlated) with BetaPro NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro NASDAQ 100 has no effect on the direction of Forstrong Global i.e., Forstrong Global and BetaPro NASDAQ go up and down completely randomly.
Pair Corralation between Forstrong Global and BetaPro NASDAQ
Assuming the 90 days trading horizon Forstrong Global Income is expected to generate 0.18 times more return on investment than BetaPro NASDAQ. However, Forstrong Global Income is 5.53 times less risky than BetaPro NASDAQ. It trades about -0.08 of its potential returns per unit of risk. BetaPro NASDAQ 100 2x is currently generating about -0.23 per unit of risk. If you would invest 2,175 in Forstrong Global Income on September 1, 2024 and sell it today you would lose (13.00) from holding Forstrong Global Income or give up 0.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forstrong Global Income vs. BetaPro NASDAQ 100 2x
Performance |
| Timeline |
| Forstrong Global Income |
| BetaPro NASDAQ 100 |
Forstrong Global and BetaPro NASDAQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forstrong Global and BetaPro NASDAQ
The main advantage of trading using opposite Forstrong Global and BetaPro NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forstrong Global position performs unexpectedly, BetaPro NASDAQ 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 BetaPro NASDAQ will offset losses from the drop in BetaPro NASDAQ's long position.| Forstrong Global vs. iShares SPTSX 60 | Forstrong Global vs. iShares Core SP | Forstrong Global vs. iShares Core SPTSX | Forstrong Global vs. BMO Aggregate Bond |
| BetaPro NASDAQ vs. BetaPro SPTSX Capped | BetaPro NASDAQ vs. Forstrong Global Income | BetaPro NASDAQ vs. BMO Aggregate Bond | BetaPro NASDAQ vs. iShares Canadian HYBrid |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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