Correlation Between KSM Mutual and IShares NASDAQ
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By analyzing existing cross correlation between KSM Mutual Funds and iShares NASDAQ 100, you can compare the effects of market volatilities on KSM Mutual and IShares 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 KSM Mutual with a short position of IShares NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of KSM Mutual and IShares NASDAQ.
Diversification Opportunities for KSM Mutual and IShares NASDAQ
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KSM and IShares is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding KSM Mutual Funds and iShares NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares NASDAQ 100 and KSM Mutual 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 KSM Mutual Funds are associated (or correlated) with IShares NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares NASDAQ 100 has no effect on the direction of KSM Mutual i.e., KSM Mutual and IShares NASDAQ go up and down completely randomly.
Pair Corralation between KSM Mutual and IShares NASDAQ
Assuming the 90 days trading horizon KSM Mutual Funds is expected to generate 2.36 times more return on investment than IShares NASDAQ. However, KSM Mutual is 2.36 times more volatile than iShares NASDAQ 100. It trades about 0.15 of its potential returns per unit of risk. iShares NASDAQ 100 is currently generating about 0.03 per unit of risk. If you would invest 5,521,000 in KSM Mutual Funds on September 3, 2024 and sell it today you would earn a total of 512,000 from holding KSM Mutual Funds or generate 9.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KSM Mutual Funds vs. iShares NASDAQ 100
Performance |
| Timeline |
| KSM Mutual Funds |
| iShares NASDAQ 100 |
KSM Mutual and IShares NASDAQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KSM Mutual and IShares NASDAQ
The main advantage of trading using opposite KSM Mutual and IShares NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KSM Mutual position performs unexpectedly, IShares 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 IShares NASDAQ will offset losses from the drop in IShares NASDAQ's long position.The idea behind KSM Mutual Funds and iShares NASDAQ 100 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| IShares NASDAQ vs. Harel Index Funds | IShares NASDAQ vs. Harel Index Funds | IShares NASDAQ vs. Harel Sal SP |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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