Correlation Between Fisher Large and Nasdaq-100(r)
Can any of the company-specific risk be diversified away by investing in both Fisher Large and Nasdaq-100(r) 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 Fisher Large and Nasdaq-100(r) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fisher Large Cap and Nasdaq 100 2x Strategy, you can compare the effects of market volatilities on Fisher Large and Nasdaq-100(r) 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 Fisher Large with a short position of Nasdaq-100(r). Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Large and Nasdaq-100(r).
Diversification Opportunities for Fisher Large and Nasdaq-100(r)
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fisher and Nasdaq-100(r) is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Large 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 Fisher Large 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 Fisher Large Cap are associated (or correlated) with Nasdaq-100(r). 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 Fisher Large i.e., Fisher Large and Nasdaq-100(r) go up and down completely randomly.
Pair Corralation between Fisher Large and Nasdaq-100(r)
Assuming the 90 days horizon Fisher Large is expected to generate 1.99 times less return on investment than Nasdaq-100(r). But when comparing it to its historical volatility, Fisher Large Cap is 2.38 times less risky than Nasdaq-100(r). It trades about 0.1 of its potential returns per unit of risk. Nasdaq 100 2x Strategy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 19,083 in Nasdaq 100 2x Strategy on October 29, 2024 and sell it today you would earn a total of 22,212 from holding Nasdaq 100 2x Strategy or generate 116.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fisher Large Cap vs. Nasdaq 100 2x Strategy
Performance |
| Timeline |
| Fisher Large Cap |
| Nasdaq 100 2x |
Fisher Large and Nasdaq-100(r) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fisher Large and Nasdaq-100(r)
The main advantage of trading using opposite Fisher Large and Nasdaq-100(r) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Large position performs unexpectedly, Nasdaq-100(r) 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(r) will offset losses from the drop in Nasdaq-100(r)'s long position.| Fisher Large vs. Dreyfus Government Cash | Fisher Large vs. Voya Government Money | Fisher Large vs. Intermediate Government Bond | Fisher Large vs. Davis Government Bond |
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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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