Correlation Between Nasdaq-100 Index and Balter Invenomic
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100 Index and Balter Invenomic 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 Nasdaq-100 Index and Balter Invenomic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Index Fund and Balter Invenomic Fund, you can compare the effects of market volatilities on Nasdaq-100 Index and Balter Invenomic 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 Nasdaq-100 Index with a short position of Balter Invenomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100 Index and Balter Invenomic.
Diversification Opportunities for Nasdaq-100 Index and Balter Invenomic
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nasdaq-100 and Balter is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Balter Invenomic Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balter Invenomic and Nasdaq-100 Index 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 Nasdaq 100 Index Fund are associated (or correlated) with Balter Invenomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balter Invenomic has no effect on the direction of Nasdaq-100 Index i.e., Nasdaq-100 Index and Balter Invenomic go up and down completely randomly.
Pair Corralation between Nasdaq-100 Index and Balter Invenomic
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to generate 1.27 times more return on investment than Balter Invenomic. However, Nasdaq-100 Index is 1.27 times more volatile than Balter Invenomic Fund. It trades about 0.11 of its potential returns per unit of risk. Balter Invenomic Fund is currently generating about -0.03 per unit of risk. If you would invest 2,380 in Nasdaq 100 Index Fund on August 31, 2024 and sell it today you would earn a total of 1,789 from holding Nasdaq 100 Index Fund or generate 75.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Balter Invenomic Fund
Performance |
| Timeline |
| Nasdaq 100 Index |
| Balter Invenomic |
Nasdaq-100 Index and Balter Invenomic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100 Index and Balter Invenomic
The main advantage of trading using opposite Nasdaq-100 Index and Balter Invenomic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100 Index position performs unexpectedly, Balter Invenomic 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 Balter Invenomic will offset losses from the drop in Balter Invenomic's long position.| Nasdaq-100 Index vs. Nasdaq 100 Index Fund | Nasdaq-100 Index vs. Nasdaq 100 Index Fund | Nasdaq-100 Index vs. Fidelity Zero Large | Nasdaq-100 Index vs. Vanguard Russell 2000 |
| Balter Invenomic vs. Aqr Long Short Equity | Balter Invenomic vs. Diamond Hill Long Short | Balter Invenomic vs. Diamond Hill Long Short | Balter Invenomic vs. Diamond Hill Long Short |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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