Correlation Between Nasdaq and Weidai
Can any of the company-specific risk be diversified away by investing in both Nasdaq and Weidai 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 Weidai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Weidai, you can compare the effects of market volatilities on Nasdaq and Weidai 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 Weidai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Weidai.
Diversification Opportunities for Nasdaq and Weidai
Pay attention - limited upside
The 3 months correlation between Nasdaq and Weidai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Weidai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weidai 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 Weidai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weidai has no effect on the direction of Nasdaq i.e., Nasdaq and Weidai go up and down completely randomly.
Pair Corralation between Nasdaq and Weidai
If you would invest 5,915 in Nasdaq Inc on September 14, 2024 and sell it today you would earn a total of 2,172 from holding Nasdaq Inc or generate 36.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Nasdaq Inc vs. Weidai
Performance |
| Timeline |
| Nasdaq Inc |
| Weidai |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nasdaq and Weidai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Weidai
The main advantage of trading using opposite Nasdaq and Weidai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Weidai 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 Weidai will offset losses from the drop in Weidai's long position.The idea behind Nasdaq Inc and Weidai 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.| Weidai vs. Saia Inc | Weidai vs. East Africa Metals | Weidai vs. Verra Mobility Corp | Weidai vs. Ryanair Holdings PLC |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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