Correlation Between BetaPro NASDAQ and Guardian Canadian
Can any of the company-specific risk be diversified away by investing in both BetaPro NASDAQ and Guardian Canadian 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 Guardian Canadian 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 Guardian Canadian Sector, you can compare the effects of market volatilities on BetaPro NASDAQ and Guardian Canadian 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 Guardian Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro NASDAQ and Guardian Canadian.
Diversification Opportunities for BetaPro NASDAQ and Guardian Canadian
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BetaPro and Guardian is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and Guardian Canadian Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Canadian Sector 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 Guardian Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Canadian Sector has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and Guardian Canadian go up and down completely randomly.
Pair Corralation between BetaPro NASDAQ and Guardian Canadian
Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to under-perform the Guardian Canadian. In addition to that, BetaPro NASDAQ is 3.92 times more volatile than Guardian Canadian Sector. It trades about -0.05 of its total potential returns per unit of risk. Guardian Canadian Sector is currently generating about 0.2 per unit of volatility. If you would invest 2,349 in Guardian Canadian Sector on September 13, 2024 and sell it today you would earn a total of 388.00 from holding Guardian Canadian Sector or generate 16.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro NASDAQ 100 2x vs. Guardian Canadian Sector
Performance |
| Timeline |
| BetaPro NASDAQ 100 |
| Guardian Canadian Sector |
BetaPro NASDAQ and Guardian Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro NASDAQ and Guardian Canadian
The main advantage of trading using opposite BetaPro NASDAQ and Guardian Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro NASDAQ position performs unexpectedly, Guardian Canadian 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 Guardian Canadian will offset losses from the drop in Guardian Canadian's long position.| BetaPro NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro SP TSX | BetaPro NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro SPTSX Capped |
| Guardian Canadian vs. iShares SPTSX 60 | Guardian Canadian vs. iShares Core SPTSX | Guardian Canadian vs. BMO SPTSX Capped | Guardian Canadian vs. Vanguard FTSE Canada |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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