Correlation Between Nasdaq 100 and Cref Inflation
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Cref Inflation 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 Cref Inflation 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 Cref Inflation Linked Bond, you can compare the effects of market volatilities on Nasdaq 100 and Cref Inflation 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 Cref Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Cref Inflation.
Diversification Opportunities for Nasdaq 100 and Cref Inflation
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nasdaq and Cref is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Cref Inflation Linked Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Inflation Linked 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 Cref Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Inflation Linked has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Cref Inflation go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Cref Inflation
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 14.24 times more return on investment than Cref Inflation. However, Nasdaq 100 is 14.24 times more volatile than Cref Inflation Linked Bond. It trades about 0.03 of its potential returns per unit of risk. Cref Inflation Linked Bond is currently generating about 0.12 per unit of risk. If you would invest 39,669 in Nasdaq 100 2x Strategy on September 14, 2024 and sell it today you would earn a total of 2,175 from holding Nasdaq 100 2x Strategy or generate 5.48% 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 2x Strategy vs. Cref Inflation Linked Bond
Performance |
| Timeline |
| Nasdaq 100 2x |
| Cref Inflation Linked |
Nasdaq 100 and Cref Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Cref Inflation
The main advantage of trading using opposite Nasdaq 100 and Cref Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Cref Inflation 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 Cref Inflation will offset losses from the drop in Cref Inflation's long position.| Nasdaq 100 vs. Calamos Global Equity | Nasdaq 100 vs. Dreyfusnewton International Equity | Nasdaq 100 vs. Gmo Global Equity | Nasdaq 100 vs. Ab Fixed Income Shares |
| Cref Inflation vs. Nasdaq 100 2x Strategy | Cref Inflation vs. Black Oak Emerging | Cref Inflation vs. Ashmore Emerging Markets | Cref Inflation vs. Franklin Emerging Market |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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