Correlation Between Nasdaq-100(r) and Nasdaq-100 Fund
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Nasdaq-100 Fund 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(r) and Nasdaq-100 Fund 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 Nasdaq 100 Fund Investor, you can compare the effects of market volatilities on Nasdaq-100(r) and Nasdaq-100 Fund 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(r) with a short position of Nasdaq-100 Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Nasdaq-100 Fund.
Diversification Opportunities for Nasdaq-100(r) and Nasdaq-100 Fund
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nasdaq-100(r) and NASDAQ-100 is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Nasdaq 100 Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Fund and Nasdaq-100(r) 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 Nasdaq-100 Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Fund has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Nasdaq-100 Fund go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Nasdaq-100 Fund
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 1.97 times more return on investment than Nasdaq-100 Fund. However, Nasdaq-100(r) is 1.97 times more volatile than Nasdaq 100 Fund Investor. It trades about 0.08 of its potential returns per unit of risk. Nasdaq 100 Fund Investor is currently generating about 0.09 per unit of risk. If you would invest 39,793 in Nasdaq 100 2x Strategy on August 28, 2024 and sell it today you would earn a total of 1,486 from holding Nasdaq 100 2x Strategy or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Nasdaq 100 Fund Investor
Performance |
| Timeline |
| Nasdaq 100 2x |
| Nasdaq 100 Fund |
Nasdaq-100(r) and Nasdaq-100 Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Nasdaq-100 Fund
The main advantage of trading using opposite Nasdaq-100(r) and Nasdaq-100 Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Nasdaq-100 Fund 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 Nasdaq-100 Fund will offset losses from the drop in Nasdaq-100 Fund's long position.| Nasdaq-100(r) vs. Ab Value Fund | Nasdaq-100(r) vs. Rational Special Situations | Nasdaq-100(r) vs. Ab E Opportunities | Nasdaq-100(r) vs. Qs Growth Fund |
| Nasdaq-100 Fund vs. Fidelity Advisor Gold | Nasdaq-100 Fund vs. Great West Goldman Sachs | Nasdaq-100 Fund vs. Short Precious Metals | Nasdaq-100 Fund vs. Franklin Gold Precious |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |