Correlation Between Nasdaq 100 and Oat Futures
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Oat Futures 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 100 and Oat Futures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 and Oat Futures, you can compare the effects of market volatilities on Nasdaq 100 and Oat Futures 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 100 with a short position of Oat Futures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Oat Futures.
Diversification Opportunities for Nasdaq 100 and Oat Futures
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nasdaq and Oat is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 and Oat Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oat Futures and Nasdaq 100 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 100 are associated (or correlated) with Oat Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oat Futures has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Oat Futures go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Oat Futures
Assuming the 90 days horizon Nasdaq 100 is expected to generate 0.53 times more return on investment than Oat Futures. However, Nasdaq 100 is 1.9 times less risky than Oat Futures. It trades about 0.1 of its potential returns per unit of risk. Oat Futures is currently generating about -0.01 per unit of risk. If you would invest 1,586,900 in Nasdaq 100 on August 29, 2024 and sell it today you would earn a total of 512,250 from holding Nasdaq 100 or generate 32.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Nasdaq 100 vs. Oat Futures
Performance |
| Timeline |
| Nasdaq 100 |
| Oat Futures |
Nasdaq 100 and Oat Futures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Oat Futures
The main advantage of trading using opposite Nasdaq 100 and Oat Futures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Oat Futures 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 Oat Futures will offset losses from the drop in Oat Futures' long position.| Nasdaq 100 vs. Corn Futures | Nasdaq 100 vs. Five Year Treasury Note | Nasdaq 100 vs. Live Cattle Futures | Nasdaq 100 vs. Lean Hogs Futures |
| Oat Futures vs. Class III Milk | Oat Futures vs. 30 Year Treasury | Oat Futures vs. Sugar | Oat Futures vs. Lean Hogs Futures |
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.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |