Correlation Between Quantified Market and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both Quantified Market and Nasdaq 100 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 Quantified Market and Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quantified Market Leaders and Nasdaq 100 Fund Class, you can compare the effects of market volatilities on Quantified Market and Nasdaq 100 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 Quantified Market with a short position of Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantified Market and Nasdaq 100.
Diversification Opportunities for Quantified Market and Nasdaq 100
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Quantified and Nasdaq is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Quantified Market Leaders and Nasdaq 100 Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Fund and Quantified Market 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 Quantified Market Leaders are associated (or correlated) with Nasdaq 100. 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 Fund has no effect on the direction of Quantified Market i.e., Quantified Market and Nasdaq 100 go up and down completely randomly.
Pair Corralation between Quantified Market and Nasdaq 100
Assuming the 90 days horizon Quantified Market Leaders is expected to generate 1.27 times more return on investment than Nasdaq 100. However, Quantified Market is 1.27 times more volatile than Nasdaq 100 Fund Class. It trades about 0.18 of its potential returns per unit of risk. Nasdaq 100 Fund Class is currently generating about 0.15 per unit of risk. If you would invest 1,050 in Quantified Market Leaders on September 4, 2024 and sell it today you would earn a total of 165.00 from holding Quantified Market Leaders or generate 15.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Quantified Market Leaders vs. Nasdaq 100 Fund Class
Performance |
| Timeline |
| Quantified Market Leaders |
| Nasdaq 100 Fund |
Quantified Market and Nasdaq 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quantified Market and Nasdaq 100
The main advantage of trading using opposite Quantified Market and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantified Market position performs unexpectedly, Nasdaq 100 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 will offset losses from the drop in Nasdaq 100's long position.| Quantified Market vs. Nasdaq 100 Fund Class | Quantified Market vs. Commonwealth Global Fund | Quantified Market vs. Balanced Fund Investor | Quantified Market vs. Commodities Strategy Fund |
| Nasdaq 100 vs. Nasdaq 100 Fund Class | Nasdaq 100 vs. Nasdaq 100 Fund Class | Nasdaq 100 vs. Nasdaq 100 2x Strategy | Nasdaq 100 vs. Dow 2x Strategy |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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