Correlation Between Nasdaq 100 and Strategic Income
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Strategic Income 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 Nasdaq 100 and Strategic Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Fund Class and Strategic Income Fund, you can compare the effects of market volatilities on Nasdaq 100 and Strategic Income 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 Nasdaq 100 with a short position of Strategic Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Strategic Income.
Diversification Opportunities for Nasdaq 100 and Strategic Income
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nasdaq and Strategic is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Fund Class and Strategic Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Income and 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 Nasdaq 100 Fund Class are associated (or correlated) with Strategic Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Income has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Strategic Income go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Strategic Income
Assuming the 90 days horizon Nasdaq 100 Fund Class is expected to generate 4.72 times more return on investment than Strategic Income. However, Nasdaq 100 is 4.72 times more volatile than Strategic Income Fund. It trades about 0.09 of its potential returns per unit of risk. Strategic Income Fund is currently generating about 0.12 per unit of risk. If you would invest 7,858 in Nasdaq 100 Fund Class on September 12, 2024 and sell it today you would earn a total of 123.00 from holding Nasdaq 100 Fund Class or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Fund Class vs. Strategic Income Fund
Performance |
| Timeline |
| Nasdaq 100 Fund |
| Strategic Income |
Nasdaq 100 and Strategic Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Strategic Income
The main advantage of trading using opposite Nasdaq 100 and Strategic Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Strategic Income 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 Strategic Income will offset losses from the drop in Strategic Income's long position.| 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 |
| Strategic Income vs. M Large Cap | Strategic Income vs. Large Cap Growth Profund | Strategic Income vs. Qs Large Cap | Strategic Income vs. Americafirst 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |