Correlation Between PACCAR and Nasdaq CTA
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By analyzing existing cross correlation between PACCAR Inc and Nasdaq CTA Artificial, you can compare the effects of market volatilities on PACCAR and Nasdaq CTA 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 PACCAR with a short position of Nasdaq CTA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PACCAR and Nasdaq CTA.
Diversification Opportunities for PACCAR and Nasdaq CTA
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PACCAR and Nasdaq is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding PACCAR Inc and Nasdaq CTA Artificial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq CTA Artificial and PACCAR 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 PACCAR Inc are associated (or correlated) with Nasdaq CTA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq CTA Artificial has no effect on the direction of PACCAR i.e., PACCAR and Nasdaq CTA go up and down completely randomly.
Pair Corralation between PACCAR and Nasdaq CTA
Given the investment horizon of 90 days PACCAR Inc is expected to under-perform the Nasdaq CTA. In addition to that, PACCAR is 1.28 times more volatile than Nasdaq CTA Artificial. It trades about 0.0 of its total potential returns per unit of risk. Nasdaq CTA Artificial is currently generating about 0.26 per unit of volatility. If you would invest 157,228 in Nasdaq CTA Artificial on September 19, 2024 and sell it today you would earn a total of 9,049 from holding Nasdaq CTA Artificial or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
PACCAR Inc vs. Nasdaq CTA Artificial
Performance |
| Timeline |
PACCAR and Nasdaq CTA Volatility Contrast
Predicted Return Density |
| Returns |
PACCAR Inc
Pair trading matchups for PACCAR
Nasdaq CTA Artificial
Pair trading matchups for Nasdaq CTA
Pair Trading with PACCAR and Nasdaq CTA
The main advantage of trading using opposite PACCAR and Nasdaq CTA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PACCAR position performs unexpectedly, Nasdaq CTA 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 Nasdaq CTA will offset losses from the drop in Nasdaq CTA's long position.The idea behind PACCAR Inc and Nasdaq CTA Artificial 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.| Nasdaq CTA vs. Global E Online | Nasdaq CTA vs. Addus HomeCare | Nasdaq CTA vs. Boston Omaha Corp | Nasdaq CTA vs. Hooker Furniture |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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