Correlation Between Nasdaq and Predex Funds
Can any of the company-specific risk be diversified away by investing in both Nasdaq and Predex Funds 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 Predex Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Predex Funds, you can compare the effects of market volatilities on Nasdaq and Predex Funds 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 Predex Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Predex Funds.
Diversification Opportunities for Nasdaq and Predex Funds
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nasdaq and Predex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Predex Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Predex Funds 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 Predex Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Predex Funds has no effect on the direction of Nasdaq i.e., Nasdaq and Predex Funds go up and down completely randomly.
Pair Corralation between Nasdaq and Predex Funds
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 3.45 times more return on investment than Predex Funds. However, Nasdaq is 3.45 times more volatile than Predex Funds. It trades about 0.05 of its potential returns per unit of risk. Predex Funds is currently generating about -0.09 per unit of risk. If you would invest 5,951 in Nasdaq Inc on September 20, 2024 and sell it today you would earn a total of 1,796 from holding Nasdaq Inc or generate 30.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Nasdaq Inc vs. Predex Funds
Performance |
| Timeline |
| Nasdaq Inc |
| Predex Funds |
Nasdaq and Predex Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Predex Funds
The main advantage of trading using opposite Nasdaq and Predex Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Predex Funds 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 Predex Funds will offset losses from the drop in Predex Funds' long position.The idea behind Nasdaq Inc and Predex Funds 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.| Predex Funds vs. Ab Global Bond | Predex Funds vs. 361 Global Longshort | Predex Funds vs. Barings Global Floating | Predex Funds vs. Ab Global Risk |
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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