Correlation Between BetaPro NASDAQ and Harvest Equal
Can any of the company-specific risk be diversified away by investing in both BetaPro NASDAQ and Harvest Equal 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 Harvest Equal 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 Harvest Equal Weight, you can compare the effects of market volatilities on BetaPro NASDAQ and Harvest Equal 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 Harvest Equal. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro NASDAQ and Harvest Equal.
Diversification Opportunities for BetaPro NASDAQ and Harvest Equal
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BetaPro and Harvest is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and Harvest Equal Weight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Equal Weight 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 Harvest Equal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Equal Weight has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and Harvest Equal go up and down completely randomly.
Pair Corralation between BetaPro NASDAQ and Harvest Equal
Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to under-perform the Harvest Equal. In addition to that, BetaPro NASDAQ is 3.06 times more volatile than Harvest Equal Weight. It trades about -0.22 of its total potential returns per unit of risk. Harvest Equal Weight is currently generating about 0.41 per unit of volatility. If you would invest 1,731 in Harvest Equal Weight on September 3, 2024 and sell it today you would earn a total of 98.00 from holding Harvest Equal Weight or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro NASDAQ 100 2x vs. Harvest Equal Weight
Performance |
| Timeline |
| BetaPro NASDAQ 100 |
| Harvest Equal Weight |
BetaPro NASDAQ and Harvest Equal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro NASDAQ and Harvest Equal
The main advantage of trading using opposite BetaPro NASDAQ and Harvest Equal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro NASDAQ position performs unexpectedly, Harvest Equal 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 Harvest Equal will offset losses from the drop in Harvest Equal'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 |
| Harvest Equal vs. International Zeolite Corp | Harvest Equal vs. European Residential Real | Harvest Equal vs. Financial 15 Split | Harvest Equal vs. Rubicon Organics |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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