Correlation Between BetaPro NASDAQ and TD Q

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Can any of the company-specific risk be diversified away by investing in both BetaPro NASDAQ and TD Q 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 TD Q 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 TD Q Global, you can compare the effects of market volatilities on BetaPro NASDAQ and TD Q 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 TD Q. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro NASDAQ and TD Q.

Diversification Opportunities for BetaPro NASDAQ and TD Q

-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between BetaPro and TQGM is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and TD Q Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Q Global 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 TD Q. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Q Global has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and TD Q go up and down completely randomly.

Pair Corralation between BetaPro NASDAQ and TD Q

Assuming the 90 days trading horizon BetaPro NASDAQ is expected to generate 1.53 times less return on investment than TD Q. In addition to that, BetaPro NASDAQ is 3.59 times more volatile than TD Q Global. It trades about 0.02 of its total potential returns per unit of risk. TD Q Global is currently generating about 0.14 per unit of volatility. If you would invest  1,921  in TD Q Global on October 24, 2024 and sell it today you would earn a total of  33.00  from holding TD Q Global or generate 1.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy95.0%
ValuesDaily Returns

BetaPro NASDAQ 100 2x  vs.  TD Q Global

 Performance 
       Timeline  
BetaPro NASDAQ 100 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BetaPro NASDAQ 100 2x has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.
TD Q Global 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in TD Q Global are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, TD Q may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BetaPro NASDAQ and TD Q Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BetaPro NASDAQ and TD Q

The main advantage of trading using opposite BetaPro NASDAQ and TD Q positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro NASDAQ position performs unexpectedly, TD Q 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 TD Q will offset losses from the drop in TD Q's long position.
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The idea behind BetaPro NASDAQ 100 2x and TD Q Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 CEOs Directory module to screen CEOs from public companies around the world.

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