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 MSCI, 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
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BetaPro and IShares is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and iShares Core MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core MSCI 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 MSCI 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 2.77 times more volatile than iShares Core MSCI. It trades about -0.26 of its total potential returns per unit of risk. iShares Core MSCI is currently generating about -0.11 per unit of volatility. If you would invest 2,991 in iShares Core MSCI on September 4, 2024 and sell it today you would lose (52.00) from holding iShares Core MSCI or give up 1.74% of portfolio value 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. iShares Core MSCI
Performance |
| Timeline |
| BetaPro NASDAQ 100 |
| iShares Core MSCI |
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 SP 500 | BetaPro NASDAQ vs. BetaPro NASDAQ 100 2x | BetaPro NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro SPTSX 60 |
| IShares Core vs. RBC Quant European | IShares Core vs. RBC Quant Canadian | IShares Core vs. RBC Quant EAFE | IShares Core vs. RBC Quant Dividend |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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