Correlation Between Nasdaq and ETFS WNA
Can any of the company-specific risk be diversified away by investing in both Nasdaq and ETFS WNA 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 ETFS WNA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and ETFS WNA Global, you can compare the effects of market volatilities on Nasdaq and ETFS WNA 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 ETFS WNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and ETFS WNA.
Diversification Opportunities for Nasdaq and ETFS WNA
Pay attention - limited upside
The 3 months correlation between Nasdaq and ETFS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and ETFS WNA Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS WNA Global 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 ETFS WNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS WNA Global has no effect on the direction of Nasdaq i.e., Nasdaq and ETFS WNA go up and down completely randomly.
Pair Corralation between Nasdaq and ETFS WNA
If you would invest (100.00) in ETFS WNA Global on September 22, 2024 and sell it today you would earn a total of 100.00 from holding ETFS WNA Global or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Nasdaq Inc vs. ETFS WNA Global
Performance |
| Timeline |
| Nasdaq Inc |
| ETFS WNA Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nasdaq and ETFS WNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and ETFS WNA
The main advantage of trading using opposite Nasdaq and ETFS WNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, ETFS WNA 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 ETFS WNA will offset losses from the drop in ETFS WNA's long position.The idea behind Nasdaq Inc and ETFS WNA Global 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.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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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