Correlation Between Nasdaq and SPASX 300
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By analyzing existing cross correlation between Nasdaq Inc and SPASX 300 Media, you can compare the effects of market volatilities on Nasdaq and SPASX 300 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 with a short position of SPASX 300. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and SPASX 300.
Diversification Opportunities for Nasdaq and SPASX 300
Almost no diversification
The 3 months correlation between Nasdaq and SPASX is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and SPASX 300 Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPASX 300 Media and Nasdaq 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 Inc are associated (or correlated) with SPASX 300. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPASX 300 Media has no effect on the direction of Nasdaq i.e., Nasdaq and SPASX 300 go up and down completely randomly.
Pair Corralation between Nasdaq and SPASX 300
Given the investment horizon of 90 days Nasdaq is expected to generate 1.32 times less return on investment than SPASX 300. In addition to that, Nasdaq is 1.19 times more volatile than SPASX 300 Media. It trades about 0.05 of its total potential returns per unit of risk. SPASX 300 Media is currently generating about 0.08 per unit of volatility. If you would invest 165,871 in SPASX 300 Media on September 14, 2024 and sell it today you would earn a total of 90,466 from holding SPASX 300 Media or generate 54.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.4% |
| Values | Daily Returns |
Nasdaq Inc vs. SPASX 300 Media
Performance |
| Timeline |
Nasdaq and SPASX 300 Volatility Contrast
Predicted Return Density |
| Returns |
Nasdaq Inc
Pair trading matchups for Nasdaq
SPASX 300 Media
Pair trading matchups for SPASX 300
Pair Trading with Nasdaq and SPASX 300
The main advantage of trading using opposite Nasdaq and SPASX 300 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, SPASX 300 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 SPASX 300 will offset losses from the drop in SPASX 300's long position.The idea behind Nasdaq Inc and SPASX 300 Media 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.| SPASX 300 vs. Charter Hall Retail | SPASX 300 vs. Health and Plant | SPASX 300 vs. Apiam Animal Health | SPASX 300 vs. Healthco Healthcare and |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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