Correlation Between Nasdaq and Broad Capital
Can any of the company-specific risk be diversified away by investing in both Nasdaq and Broad Capital 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 and Broad Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Broad Capital Acquisition, you can compare the effects of market volatilities on Nasdaq and Broad Capital 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 Broad Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Broad Capital.
Diversification Opportunities for Nasdaq and Broad Capital
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nasdaq and Broad is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Broad Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broad Capital Acquisition 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 Broad Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broad Capital Acquisition has no effect on the direction of Nasdaq i.e., Nasdaq and Broad Capital go up and down completely randomly.
Pair Corralation between Nasdaq and Broad Capital
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.42 times more return on investment than Broad Capital. However, Nasdaq Inc is 2.4 times less risky than Broad Capital. It trades about 0.09 of its potential returns per unit of risk. Broad Capital Acquisition is currently generating about 0.02 per unit of risk. If you would invest 7,738 in Nasdaq Inc on October 20, 2024 and sell it today you would earn a total of 145.00 from holding Nasdaq Inc or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq Inc vs. Broad Capital Acquisition
Performance |
| Timeline |
| Nasdaq Inc |
| Broad Capital Acquisition |
Nasdaq and Broad Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Broad Capital
The main advantage of trading using opposite Nasdaq and Broad Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Broad Capital 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 Broad Capital will offset losses from the drop in Broad Capital's long position.The idea behind Nasdaq Inc and Broad Capital Acquisition 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.| Broad Capital vs. Manaris Corp | Broad Capital vs. Alpha One | Broad Capital vs. AlphaTime Acquisition Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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