Correlation Between BetaPro Gold and BetaPro NASDAQ
Can any of the company-specific risk be diversified away by investing in both BetaPro Gold 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 BetaPro Gold and BetaPro NASDAQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro Gold Bullion and BetaPro NASDAQ 100 2x, you can compare the effects of market volatilities on BetaPro Gold 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 BetaPro Gold with a short position of BetaPro NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro Gold and BetaPro NASDAQ.
Diversification Opportunities for BetaPro Gold and BetaPro NASDAQ
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BetaPro and BetaPro is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Gold Bullion 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 BetaPro Gold 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 BetaPro Gold Bullion 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 BetaPro Gold i.e., BetaPro Gold and BetaPro NASDAQ go up and down completely randomly.
Pair Corralation between BetaPro Gold and BetaPro NASDAQ
Assuming the 90 days trading horizon BetaPro Gold Bullion is expected to under-perform the BetaPro NASDAQ. But the etf apears to be less risky and, when comparing its historical volatility, BetaPro Gold Bullion is 1.19 times less risky than BetaPro NASDAQ. The etf trades about -0.12 of its potential returns per unit of risk. The BetaPro NASDAQ 100 2x is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,348 in BetaPro NASDAQ 100 2x on August 25, 2024 and sell it today you would earn a total of 999.00 from holding BetaPro NASDAQ 100 2x or generate 74.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro Gold Bullion vs. BetaPro NASDAQ 100 2x
Performance |
| Timeline |
| BetaPro Gold Bullion |
| BetaPro NASDAQ 100 |
BetaPro Gold and BetaPro NASDAQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro Gold and BetaPro NASDAQ
The main advantage of trading using opposite BetaPro Gold and BetaPro NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro Gold 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.| BetaPro Gold vs. BetaPro NASDAQ 100 2x | BetaPro Gold vs. BetaPro Canadian Gold | BetaPro Gold vs. BetaPro Crude Oil | BetaPro Gold vs. BetaPro Natural Gas |
| BetaPro NASDAQ vs. BetaPro Canadian Gold | BetaPro NASDAQ vs. BetaPro Crude Oil | BetaPro NASDAQ vs. BetaPro Natural Gas | BetaPro NASDAQ vs. BetaPro Crude Oil |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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