Correlation Between Nasdaq-100 Profund and Small-cap Profund
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100 Profund and Small-cap Profund 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 Small-cap Profund 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 Small Cap Profund Small Cap, you can compare the effects of market volatilities on Nasdaq-100 Profund and Small-cap Profund 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 Small-cap Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100 Profund and Small-cap Profund.
Diversification Opportunities for Nasdaq-100 Profund and Small-cap Profund
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nasdaq-100 and Small-cap is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Profund Nasdaq 100 and Small Cap Profund Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Profund 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 Small-cap Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Profund has no effect on the direction of Nasdaq-100 Profund i.e., Nasdaq-100 Profund and Small-cap Profund go up and down completely randomly.
Pair Corralation between Nasdaq-100 Profund and Small-cap Profund
Assuming the 90 days horizon Nasdaq-100 Profund is expected to generate 1.17 times less return on investment than Small-cap Profund. In addition to that, Nasdaq-100 Profund is 1.31 times more volatile than Small Cap Profund Small Cap. It trades about 0.1 of its total potential returns per unit of risk. Small Cap Profund Small Cap is currently generating about 0.16 per unit of volatility. If you would invest 9,047 in Small Cap Profund Small Cap on November 2, 2024 and sell it today you would earn a total of 282.00 from holding Small Cap Profund Small Cap or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Nasdaq 100 Profund Nasdaq 100 vs. Small Cap Profund Small Cap
Performance |
| Timeline |
| Nasdaq 100 Profund |
| Small Cap Profund |
Nasdaq-100 Profund and Small-cap Profund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100 Profund and Small-cap Profund
The main advantage of trading using opposite Nasdaq-100 Profund and Small-cap Profund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100 Profund position performs unexpectedly, Small-cap Profund 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 Small-cap Profund will offset losses from the drop in Small-cap Profund'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 |
| Small-cap Profund vs. Hartford Healthcare Hls | Small-cap Profund vs. Health Care Ultrasector | Small-cap Profund vs. Deutsche Health And | Small-cap Profund vs. Lord Abbett Health |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |