Correlation Between Inverse Nasdaq-100 and Multi-manager High
Can any of the company-specific risk be diversified away by investing in both Inverse Nasdaq-100 and Multi-manager High 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 Multi-manager High 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 Multi Manager High Yield, you can compare the effects of market volatilities on Inverse Nasdaq-100 and Multi-manager High 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 Multi-manager High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse Nasdaq-100 and Multi-manager High.
Diversification Opportunities for Inverse Nasdaq-100 and Multi-manager High
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Inverse and Multi-manager is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Inverse Nasdaq 100 Strategy and Multi Manager High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager High 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 Multi-manager High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager High has no effect on the direction of Inverse Nasdaq-100 i.e., Inverse Nasdaq-100 and Multi-manager High go up and down completely randomly.
Pair Corralation between Inverse Nasdaq-100 and Multi-manager High
Assuming the 90 days horizon Inverse Nasdaq 100 Strategy is expected to under-perform the Multi-manager High. In addition to that, Inverse Nasdaq-100 is 5.68 times more volatile than Multi Manager High Yield. It trades about -0.06 of its total potential returns per unit of risk. Multi Manager High Yield is currently generating about 0.19 per unit of volatility. If you would invest 736.00 in Multi Manager High Yield on August 31, 2024 and sell it today you would earn a total of 114.00 from holding Multi Manager High Yield or generate 15.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inverse Nasdaq 100 Strategy vs. Multi Manager High Yield
Performance |
| Timeline |
| Inverse Nasdaq 100 |
| Multi Manager High |
Inverse Nasdaq-100 and Multi-manager High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inverse Nasdaq-100 and Multi-manager High
The main advantage of trading using opposite Inverse Nasdaq-100 and Multi-manager High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse Nasdaq-100 position performs unexpectedly, Multi-manager High 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 Multi-manager High will offset losses from the drop in Multi-manager High's long position.| Inverse Nasdaq-100 vs. American Century High | Inverse Nasdaq-100 vs. Multi Manager High Yield | Inverse Nasdaq-100 vs. Virtus High Yield | Inverse Nasdaq-100 vs. Mesirow Financial High |
| Multi-manager High vs. T Rowe Price | Multi-manager High vs. Strategic Allocation Aggressive | Multi-manager High vs. Metropolitan West High | Multi-manager High vs. Morningstar Aggressive Growth |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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