Correlation Between BetaPro NASDAQ and Vanguard Canadian
Can any of the company-specific risk be diversified away by investing in both BetaPro NASDAQ and Vanguard 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 Vanguard 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 Vanguard Canadian Short Term, you can compare the effects of market volatilities on BetaPro NASDAQ and Vanguard 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 Vanguard Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro NASDAQ and Vanguard Canadian.
Diversification Opportunities for BetaPro NASDAQ and Vanguard Canadian
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BetaPro and Vanguard is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and Vanguard Canadian Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Canadian Short 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 Vanguard Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Canadian Short has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and Vanguard Canadian go up and down completely randomly.
Pair Corralation between BetaPro NASDAQ and Vanguard Canadian
Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to generate 75.79 times more return on investment than Vanguard Canadian. However, BetaPro NASDAQ is 75.79 times more volatile than Vanguard Canadian Short Term. It trades about 0.03 of its potential returns per unit of risk. Vanguard Canadian Short Term is currently generating about 0.13 per unit of risk. If you would invest 824.00 in BetaPro NASDAQ 100 2x on August 29, 2024 and sell it today you would earn a total of 250.00 from holding BetaPro NASDAQ 100 2x or generate 30.34% 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. Vanguard Canadian Short Term
Performance |
| Timeline |
| BetaPro NASDAQ 100 |
| Vanguard Canadian Short |
BetaPro NASDAQ and Vanguard Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro NASDAQ and Vanguard Canadian
The main advantage of trading using opposite BetaPro NASDAQ and Vanguard Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro NASDAQ position performs unexpectedly, Vanguard 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 Vanguard Canadian will offset losses from the drop in Vanguard Canadian'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 |
| Vanguard Canadian vs. Vanguard Canadian Short | Vanguard Canadian vs. Global X Active | Vanguard Canadian vs. Invesco 1 5 Year | Vanguard Canadian vs. iShares Canadian HYBrid |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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