Correlation Between Nasdaq-100 Profund and Profunds-large Cap
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100 Profund and Profunds-large Cap 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 Profund and Profunds-large Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Profund Nasdaq 100 and Profunds Large Cap Growth, you can compare the effects of market volatilities on Nasdaq-100 Profund and Profunds-large Cap 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 Profund with a short position of Profunds-large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100 Profund and Profunds-large Cap.
Diversification Opportunities for Nasdaq-100 Profund and Profunds-large Cap
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nasdaq-100 and Profunds-large is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Profund Nasdaq 100 and Profunds Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profunds Large Cap and Nasdaq-100 Profund 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 Profund Nasdaq 100 are associated (or correlated) with Profunds-large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profunds Large Cap has no effect on the direction of Nasdaq-100 Profund i.e., Nasdaq-100 Profund and Profunds-large Cap go up and down completely randomly.
Pair Corralation between Nasdaq-100 Profund and Profunds-large Cap
Assuming the 90 days horizon Nasdaq-100 Profund is expected to generate 1.03 times less return on investment than Profunds-large Cap. In addition to that, Nasdaq-100 Profund is 1.03 times more volatile than Profunds Large Cap Growth. It trades about 0.08 of its total potential returns per unit of risk. Profunds Large Cap Growth is currently generating about 0.08 per unit of volatility. If you would invest 3,395 in Profunds Large Cap Growth on August 27, 2024 and sell it today you would earn a total of 64.00 from holding Profunds Large Cap Growth or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Profund Nasdaq 100 vs. Profunds Large Cap Growth
Performance |
| Timeline |
| Nasdaq 100 Profund |
| Profunds Large Cap |
Nasdaq-100 Profund and Profunds-large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100 Profund and Profunds-large Cap
The main advantage of trading using opposite Nasdaq-100 Profund and Profunds-large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100 Profund position performs unexpectedly, Profunds-large Cap 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 Profunds-large Cap will offset losses from the drop in Profunds-large Cap's long position.| Nasdaq-100 Profund vs. Bull Profund Investor | Nasdaq-100 Profund vs. Small Cap Profund Small Cap | Nasdaq-100 Profund vs. Mid Cap Profund Mid Cap | Nasdaq-100 Profund vs. Small Cap Growth Profund |
| Profunds-large Cap vs. Angel Oak Multi Strategy | Profunds-large Cap vs. Ep Emerging Markets | Profunds-large Cap vs. Pnc Emerging Markets | Profunds-large Cap vs. Western Assets Emerging |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |