Correlation Between BetaPro NASDAQ and IShares Core
Can any of the company-specific risk be diversified away by investing in both BetaPro NASDAQ and IShares Core 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 IShares Core 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 iShares Core Balanced, you can compare the effects of market volatilities on BetaPro NASDAQ and IShares Core 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 IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro NASDAQ and IShares Core.
Diversification Opportunities for BetaPro NASDAQ and IShares Core
-0.95 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BetaPro and IShares is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and iShares Core Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Balanced 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 IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Balanced has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and IShares Core go up and down completely randomly.
Pair Corralation between BetaPro NASDAQ and IShares Core
Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to under-perform the IShares Core. In addition to that, BetaPro NASDAQ is 5.52 times more volatile than iShares Core Balanced. It trades about -0.23 of its total potential returns per unit of risk. iShares Core Balanced is currently generating about 0.51 per unit of volatility. If you would invest 2,966 in iShares Core Balanced on September 1, 2024 and sell it today you would earn a total of 120.00 from holding iShares Core Balanced or generate 4.05% 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. iShares Core Balanced
Performance |
| Timeline |
| BetaPro NASDAQ 100 |
| iShares Core Balanced |
BetaPro NASDAQ and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro NASDAQ and IShares Core
The main advantage of trading using opposite BetaPro NASDAQ and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro NASDAQ position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core's long position.| BetaPro NASDAQ vs. BetaPro SPTSX Capped | BetaPro NASDAQ vs. Forstrong Global Income | BetaPro NASDAQ vs. BMO Aggregate Bond | BetaPro NASDAQ vs. iShares Canadian HYBrid |
| IShares Core vs. iShares Core Growth | IShares Core vs. Vanguard Balanced Portfolio | IShares Core vs. BMO Balanced ETF | IShares Core vs. Vanguard Conservative ETF |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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