Correlation Between Inverse Nasdaq-100 and Multimanager Lifestyle
Can any of the company-specific risk be diversified away by investing in both Inverse Nasdaq-100 and Multimanager Lifestyle 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 Inverse Nasdaq-100 and Multimanager Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inverse Nasdaq 100 Strategy and Multimanager Lifestyle Moderate, you can compare the effects of market volatilities on Inverse Nasdaq-100 and Multimanager Lifestyle 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 Inverse Nasdaq-100 with a short position of Multimanager Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse Nasdaq-100 and Multimanager Lifestyle.
Diversification Opportunities for Inverse Nasdaq-100 and Multimanager Lifestyle
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inverse and Multimanager is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Inverse Nasdaq 100 Strategy and Multimanager Lifestyle Moderat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multimanager Lifestyle and Inverse Nasdaq-100 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 Inverse Nasdaq 100 Strategy are associated (or correlated) with Multimanager Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multimanager Lifestyle has no effect on the direction of Inverse Nasdaq-100 i.e., Inverse Nasdaq-100 and Multimanager Lifestyle go up and down completely randomly.
Pair Corralation between Inverse Nasdaq-100 and Multimanager Lifestyle
Assuming the 90 days horizon Inverse Nasdaq 100 Strategy is expected to under-perform the Multimanager Lifestyle. In addition to that, Inverse Nasdaq-100 is 3.43 times more volatile than Multimanager Lifestyle Moderate. It trades about -0.08 of its total potential returns per unit of risk. Multimanager Lifestyle Moderate is currently generating about 0.25 per unit of volatility. If you would invest 1,215 in Multimanager Lifestyle Moderate on November 1, 2024 and sell it today you would earn a total of 22.00 from holding Multimanager Lifestyle Moderate or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Inverse Nasdaq 100 Strategy vs. Multimanager Lifestyle Moderat
Performance |
| Timeline |
| Inverse Nasdaq 100 |
| Multimanager Lifestyle |
Inverse Nasdaq-100 and Multimanager Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inverse Nasdaq-100 and Multimanager Lifestyle
The main advantage of trading using opposite Inverse Nasdaq-100 and Multimanager Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse Nasdaq-100 position performs unexpectedly, Multimanager Lifestyle 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 Multimanager Lifestyle will offset losses from the drop in Multimanager Lifestyle's long position.| Inverse Nasdaq-100 vs. Simt Multi Asset Inflation | Inverse Nasdaq-100 vs. Ab Bond Inflation | Inverse Nasdaq-100 vs. Arrow Managed Futures | Inverse Nasdaq-100 vs. Atac Inflation Rotation |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |