Correlation Between BetaPro NASDAQ and IShares 1
Can any of the company-specific risk be diversified away by investing in both BetaPro NASDAQ and IShares 1 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 NASDAQ and IShares 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro NASDAQ 100 2x and iShares 1 5 Year, you can compare the effects of market volatilities on BetaPro NASDAQ and IShares 1 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 NASDAQ with a short position of IShares 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro NASDAQ and IShares 1.
Diversification Opportunities for BetaPro NASDAQ and IShares 1
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BetaPro and IShares is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and iShares 1 5 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 1 5 and BetaPro NASDAQ 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 NASDAQ 100 2x are associated (or correlated) with IShares 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 1 5 has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and IShares 1 go up and down completely randomly.
Pair Corralation between BetaPro NASDAQ and IShares 1
Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to under-perform the IShares 1. In addition to that, BetaPro NASDAQ is 14.79 times more volatile than iShares 1 5 Year. It trades about -0.1 of its total potential returns per unit of risk. iShares 1 5 Year is currently generating about 0.08 per unit of volatility. If you would invest 1,814 in iShares 1 5 Year on August 29, 2024 and sell it today you would earn a total of 5.00 from holding iShares 1 5 Year or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro NASDAQ 100 2x vs. iShares 1 5 Year
Performance |
| Timeline |
| BetaPro NASDAQ 100 |
| iShares 1 5 |
BetaPro NASDAQ and IShares 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro NASDAQ and IShares 1
The main advantage of trading using opposite BetaPro NASDAQ and IShares 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro NASDAQ position performs unexpectedly, IShares 1 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 IShares 1 will offset losses from the drop in IShares 1's long position.| BetaPro NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro NASDAQ 100 2x | BetaPro NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro SPTSX 60 |
| IShares 1 vs. Mackenzie Canadian Aggregate | IShares 1 vs. Mackenzie Core Plus | IShares 1 vs. Mackenzie Investment Grade | IShares 1 vs. Mackenzie Core Plus |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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