Correlation Between Nasdaq and Clean Seas
Can any of the company-specific risk be diversified away by investing in both Nasdaq and Clean Seas 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 Clean Seas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Clean Seas Seafood, you can compare the effects of market volatilities on Nasdaq and Clean Seas 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 Clean Seas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Clean Seas.
Diversification Opportunities for Nasdaq and Clean Seas
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nasdaq and Clean is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Clean Seas Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Seas Seafood 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 Clean Seas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Seas Seafood has no effect on the direction of Nasdaq i.e., Nasdaq and Clean Seas go up and down completely randomly.
Pair Corralation between Nasdaq and Clean Seas
If you would invest 7,392 in Nasdaq Inc on September 1, 2024 and sell it today you would earn a total of 907.00 from holding Nasdaq Inc or generate 12.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq Inc vs. Clean Seas Seafood
Performance |
| Timeline |
| Nasdaq Inc |
| Clean Seas Seafood |
Nasdaq and Clean Seas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Clean Seas
The main advantage of trading using opposite Nasdaq and Clean Seas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Clean Seas 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 Clean Seas will offset losses from the drop in Clean Seas' long position.The idea behind Nasdaq Inc and Clean Seas Seafood 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.| Clean Seas vs. Boot Barn Holdings | Clean Seas vs. Avadel Pharmaceuticals PLC | Clean Seas vs. LENSAR Inc | Clean Seas vs. Nike Inc |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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