Correlation Between Us Government and Ultra Nasdaq-100
Can any of the company-specific risk be diversified away by investing in both Us Government 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 Us Government 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 Us Government Plus and Ultra Nasdaq 100 Profunds, you can compare the effects of market volatilities on Us Government 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 Us Government with a short position of Ultra Nasdaq-100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Ultra Nasdaq-100.
Diversification Opportunities for Us Government and Ultra Nasdaq-100
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GVPIX and Ultra is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Plus 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 Us Government 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 Us Government Plus 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 Us Government i.e., Us Government and Ultra Nasdaq-100 go up and down completely randomly.
Pair Corralation between Us Government and Ultra Nasdaq-100
Assuming the 90 days horizon Us Government Plus is expected to generate 0.31 times more return on investment than Ultra Nasdaq-100. However, Us Government Plus is 3.21 times less risky than Ultra Nasdaq-100. It trades about -0.05 of its potential returns per unit of risk. Ultra Nasdaq 100 Profunds is currently generating about -0.03 per unit of risk. If you would invest 3,494 in Us Government Plus on January 16, 2025 and sell it today you would lose (243.00) from holding Us Government Plus or give up 6.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Government Plus vs. Ultra Nasdaq 100 Profunds
Performance |
| Timeline |
| Us Government Plus |
| Ultra Nasdaq 100 |
Us Government and Ultra Nasdaq-100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Ultra Nasdaq-100
The main advantage of trading using opposite Us Government and Ultra Nasdaq-100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government 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.| Us Government vs. Rbc Emerging Markets | Us Government vs. Shelton Emerging Markets | Us Government vs. Growth Strategy Fund | Us Government vs. Investec Emerging Markets |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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