Correlation Between Nasdaq 100 and Retirement Living
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Retirement Living 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 Retirement Living into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Retirement Living Through, you can compare the effects of market volatilities on Nasdaq 100 and Retirement Living 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 Retirement Living. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Retirement Living.
Diversification Opportunities for Nasdaq 100 and Retirement Living
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nasdaq and Retirement is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Retirement Living Through in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retirement Living Through 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 2x Strategy are associated (or correlated) with Retirement Living. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retirement Living Through has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Retirement Living go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Retirement Living
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 3.11 times more return on investment than Retirement Living. However, Nasdaq 100 is 3.11 times more volatile than Retirement Living Through. It trades about 0.09 of its potential returns per unit of risk. Retirement Living Through is currently generating about 0.08 per unit of risk. If you would invest 16,265 in Nasdaq 100 2x Strategy on September 3, 2024 and sell it today you would earn a total of 25,469 from holding Nasdaq 100 2x Strategy or generate 156.59% 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 2x Strategy vs. Retirement Living Through
Performance |
| Timeline |
| Nasdaq 100 2x |
| Retirement Living Through |
Nasdaq 100 and Retirement Living Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Retirement Living
The main advantage of trading using opposite Nasdaq 100 and Retirement Living positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Retirement Living 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 Retirement Living will offset losses from the drop in Retirement Living's long position.| Nasdaq 100 vs. The Hartford Emerging | Nasdaq 100 vs. Kinetics Market Opportunities | Nasdaq 100 vs. Morgan Stanley Emerging | Nasdaq 100 vs. Locorr Market Trend |
| Retirement Living vs. Growth Strategy Fund | Retirement Living vs. Templeton Emerging Markets | Retirement Living vs. Shelton Emerging Markets | Retirement Living vs. Nasdaq 100 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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