Correlation Between Nasdaq 100 and Great West
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Great West 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 Great West 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 Great West Sp Mid, you can compare the effects of market volatilities on Nasdaq 100 and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Great West.
Diversification Opportunities for Nasdaq 100 and Great West
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nasdaq and Great is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Fund Class and Great West Sp Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Sp 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Sp has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Great West go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Great West
Assuming the 90 days horizon Nasdaq 100 Fund Class is expected to generate 0.88 times more return on investment than Great West. However, Nasdaq 100 Fund Class is 1.13 times less risky than Great West. It trades about 0.09 of its potential returns per unit of risk. Great West Sp Mid is currently generating about 0.02 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 Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Fund Class vs. Great West Sp Mid
Performance |
| Timeline |
| Nasdaq 100 Fund |
| Great West Sp |
Nasdaq 100 and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Great West
The main advantage of trading using opposite Nasdaq 100 and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West'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 |
| Great West vs. Investec Global Franchise | Great West vs. Jhancock Global Equity | Great West vs. Morningstar Global Income | Great West vs. Ab Global Bond |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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