Correlation Between Ivy Mid and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both Ivy Mid and Nasdaq 100 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 Ivy Mid and Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivy Mid Cap and Nasdaq 100 2x Strategy, you can compare the effects of market volatilities on Ivy Mid and Nasdaq 100 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 Ivy Mid with a short position of Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivy Mid and Nasdaq 100.
Diversification Opportunities for Ivy Mid and Nasdaq 100
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ivy and Nasdaq is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ivy Mid Cap and Nasdaq 100 2x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 2x and Ivy Mid 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 Ivy Mid Cap are associated (or correlated) with Nasdaq 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 2x has no effect on the direction of Ivy Mid i.e., Ivy Mid and Nasdaq 100 go up and down completely randomly.
Pair Corralation between Ivy Mid and Nasdaq 100
Assuming the 90 days horizon Ivy Mid is expected to generate 10.49 times less return on investment than Nasdaq 100. But when comparing it to its historical volatility, Ivy Mid Cap is 1.17 times less risky than Nasdaq 100. It trades about 0.03 of its potential returns per unit of risk. Nasdaq 100 2x Strategy is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 38,210 in Nasdaq 100 2x Strategy on September 5, 2024 and sell it today you would earn a total of 4,693 from holding Nasdaq 100 2x Strategy or generate 12.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivy Mid Cap vs. Nasdaq 100 2x Strategy
Performance |
| Timeline |
| Ivy Mid Cap |
| Nasdaq 100 2x |
Ivy Mid and Nasdaq 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivy Mid and Nasdaq 100
The main advantage of trading using opposite Ivy Mid and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivy Mid position performs unexpectedly, Nasdaq 100 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 Nasdaq 100 will offset losses from the drop in Nasdaq 100's long position.| Ivy Mid vs. Nasdaq 100 2x Strategy | Ivy Mid vs. Barings Emerging Markets | Ivy Mid vs. T Rowe Price | Ivy Mid vs. Arrow Managed Futures |
| Nasdaq 100 vs. Gabelli Gold Fund | Nasdaq 100 vs. Precious Metals And | Nasdaq 100 vs. Vy Goldman Sachs | Nasdaq 100 vs. James Balanced Golden |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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