Correlation Between BetaPro NASDAQ and NBI Sustainable
Can any of the company-specific risk be diversified away by investing in both BetaPro NASDAQ and NBI Sustainable 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 NBI Sustainable 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 NBI Sustainable Canadian, you can compare the effects of market volatilities on BetaPro NASDAQ and NBI Sustainable 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 NBI Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro NASDAQ and NBI Sustainable.
Diversification Opportunities for BetaPro NASDAQ and NBI Sustainable
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BetaPro and NBI is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and NBI Sustainable Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBI Sustainable Canadian 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 NBI Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBI Sustainable Canadian has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and NBI Sustainable go up and down completely randomly.
Pair Corralation between BetaPro NASDAQ and NBI Sustainable
Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to generate 3.39 times more return on investment than NBI Sustainable. However, BetaPro NASDAQ is 3.39 times more volatile than NBI Sustainable Canadian. It trades about 0.09 of its potential returns per unit of risk. NBI Sustainable Canadian is currently generating about 0.04 per unit of risk. If you would invest 973.00 in BetaPro NASDAQ 100 2x on October 25, 2024 and sell it today you would earn a total of 32.00 from holding BetaPro NASDAQ 100 2x or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro NASDAQ 100 2x vs. NBI Sustainable Canadian
Performance |
| Timeline |
| BetaPro NASDAQ 100 |
| NBI Sustainable Canadian |
BetaPro NASDAQ and NBI Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro NASDAQ and NBI Sustainable
The main advantage of trading using opposite BetaPro NASDAQ and NBI Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro NASDAQ position performs unexpectedly, NBI Sustainable 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 NBI Sustainable will offset losses from the drop in NBI Sustainable'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 |
| NBI Sustainable vs. NBI Sustainable Global | NBI Sustainable vs. NBI Active Canadian | NBI Sustainable vs. NBI Liquid Alternatives | NBI Sustainable vs. NBI Global Real |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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