Correlation Between Nebraska Municipal and Invesco Nasdaq
Can any of the company-specific risk be diversified away by investing in both Nebraska Municipal and Invesco Nasdaq 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 Nebraska Municipal and Invesco Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nebraska Municipal Fund and Invesco Nasdaq 100, you can compare the effects of market volatilities on Nebraska Municipal and Invesco Nasdaq 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 Nebraska Municipal with a short position of Invesco Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nebraska Municipal and Invesco Nasdaq.
Diversification Opportunities for Nebraska Municipal and Invesco Nasdaq
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nebraska and Invesco is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nebraska Municipal Fund and Invesco Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Nasdaq 100 and Nebraska Municipal 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 Nebraska Municipal Fund are associated (or correlated) with Invesco Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Nasdaq 100 has no effect on the direction of Nebraska Municipal i.e., Nebraska Municipal and Invesco Nasdaq go up and down completely randomly.
Pair Corralation between Nebraska Municipal and Invesco Nasdaq
Assuming the 90 days horizon Nebraska Municipal is expected to generate 8.73 times less return on investment than Invesco Nasdaq. But when comparing it to its historical volatility, Nebraska Municipal Fund is 4.68 times less risky than Invesco Nasdaq. It trades about 0.05 of its potential returns per unit of risk. Invesco Nasdaq 100 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,030 in Invesco Nasdaq 100 on September 2, 2024 and sell it today you would earn a total of 1,291 from holding Invesco Nasdaq 100 or generate 42.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nebraska Municipal Fund vs. Invesco Nasdaq 100
Performance |
| Timeline |
| Nebraska Municipal |
| Invesco Nasdaq 100 |
Nebraska Municipal and Invesco Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nebraska Municipal and Invesco Nasdaq
The main advantage of trading using opposite Nebraska Municipal and Invesco Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nebraska Municipal position performs unexpectedly, Invesco Nasdaq 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 Invesco Nasdaq will offset losses from the drop in Invesco Nasdaq's long position.| Nebraska Municipal vs. Us Vector Equity | Nebraska Municipal vs. Scharf Fund Retail | Nebraska Municipal vs. Huber Capital Equity | Nebraska Municipal vs. Locorr Dynamic Equity |
| Invesco Nasdaq vs. Invesco Municipal Income | Invesco Nasdaq vs. Invesco Municipal Income | Invesco Nasdaq vs. Invesco Municipal Income | Invesco Nasdaq vs. Oppenheimer Rising Dividends |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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