Correlation Between Pace Large and Nasdaq-100(r)
Can any of the company-specific risk be diversified away by investing in both Pace Large and Nasdaq-100(r) 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 Pace Large and Nasdaq-100(r) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Large Value and Nasdaq 100 2x Strategy, you can compare the effects of market volatilities on Pace Large and Nasdaq-100(r) 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 Pace Large with a short position of Nasdaq-100(r). Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Large and Nasdaq-100(r).
Diversification Opportunities for Pace Large and Nasdaq-100(r)
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pace and Nasdaq-100(r) is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Pace Large Value and Nasdaq 100 2x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 2x and Pace Large 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 Pace Large Value are associated (or correlated) with Nasdaq-100(r). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 2x has no effect on the direction of Pace Large i.e., Pace Large and Nasdaq-100(r) go up and down completely randomly.
Pair Corralation between Pace Large and Nasdaq-100(r)
Assuming the 90 days horizon Pace Large Value is expected to generate 0.29 times more return on investment than Nasdaq-100(r). However, Pace Large Value is 3.43 times less risky than Nasdaq-100(r). It trades about 0.33 of its potential returns per unit of risk. Nasdaq 100 2x Strategy is currently generating about 0.06 per unit of risk. If you would invest 2,028 in Pace Large Value on October 28, 2024 and sell it today you would earn a total of 85.00 from holding Pace Large Value or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Large Value vs. Nasdaq 100 2x Strategy
Performance |
| Timeline |
| Pace Large Value |
| Nasdaq 100 2x |
Pace Large and Nasdaq-100(r) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Large and Nasdaq-100(r)
The main advantage of trading using opposite Pace Large and Nasdaq-100(r) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Large position performs unexpectedly, Nasdaq-100(r) 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-100(r) will offset losses from the drop in Nasdaq-100(r)'s long position.| Pace Large vs. Pimco Moditiesplus Strategy | Pace Large vs. Eagle Mlp Strategy | Pace Large vs. Morgan Stanley Emerging | Pace Large vs. William Blair Emerging |
| Nasdaq-100(r) vs. Calvert Large Cap | Nasdaq-100(r) vs. Blackrock Large Cap | Nasdaq-100(r) vs. Fisher Large Cap | Nasdaq-100(r) vs. Avantis Large Cap |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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