Correlation Between BetaPro SPTSX and BetaPro NASDAQ
Can any of the company-specific risk be diversified away by investing in both BetaPro SPTSX and BetaPro NASDAQ 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 SPTSX and BetaPro NASDAQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro SPTSX 60 and BetaPro NASDAQ 100 2x, you can compare the effects of market volatilities on BetaPro SPTSX and BetaPro NASDAQ 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 SPTSX with a short position of BetaPro NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SPTSX and BetaPro NASDAQ.
Diversification Opportunities for BetaPro SPTSX and BetaPro NASDAQ
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BetaPro and BetaPro is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SPTSX 60 and BetaPro NASDAQ 100 2x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro NASDAQ 100 and BetaPro SPTSX 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 SPTSX 60 are associated (or correlated) with BetaPro NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro NASDAQ 100 has no effect on the direction of BetaPro SPTSX i.e., BetaPro SPTSX and BetaPro NASDAQ go up and down completely randomly.
Pair Corralation between BetaPro SPTSX and BetaPro NASDAQ
Assuming the 90 days trading horizon BetaPro SPTSX 60 is expected to under-perform the BetaPro NASDAQ. But the etf apears to be less risky and, when comparing its historical volatility, BetaPro SPTSX 60 is 1.91 times less risky than BetaPro NASDAQ. The etf trades about -0.22 of its potential returns per unit of risk. The BetaPro NASDAQ 100 2x is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,406 in BetaPro NASDAQ 100 2x on October 20, 2024 and sell it today you would earn a total of 53.00 from holding BetaPro NASDAQ 100 2x or generate 2.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BetaPro SPTSX 60 vs. BetaPro NASDAQ 100 2x
Performance |
Timeline |
BetaPro SPTSX 60 |
BetaPro NASDAQ 100 |
BetaPro SPTSX and BetaPro NASDAQ Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BetaPro SPTSX and BetaPro NASDAQ
The main advantage of trading using opposite BetaPro SPTSX and BetaPro NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SPTSX position performs unexpectedly, BetaPro NASDAQ 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 BetaPro NASDAQ will offset losses from the drop in BetaPro NASDAQ's long position.BetaPro SPTSX vs. BetaPro Gold Bullion | BetaPro SPTSX vs. BetaPro NASDAQ 100 2x | BetaPro SPTSX vs. BetaPro SP TSX | BetaPro SPTSX vs. BetaPro SP TSX |
BetaPro NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro NASDAQ 100 2x | BetaPro NASDAQ vs. BetaPro SP TSX | BetaPro NASDAQ vs. BetaPro SP 500 |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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