Correlation Between Nasdaq 100 and Wcm China
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Wcm China 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 Wcm China 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 Wcm China Quality, you can compare the effects of market volatilities on Nasdaq 100 and Wcm China 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 Wcm China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Wcm China.
Diversification Opportunities for Nasdaq 100 and Wcm China
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nasdaq and Wcm is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Wcm China Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wcm China Quality 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 Wcm China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wcm China Quality has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Wcm China go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Wcm China
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 1.55 times more return on investment than Wcm China. However, Nasdaq 100 is 1.55 times more volatile than Wcm China Quality. It trades about 0.08 of its potential returns per unit of risk. Wcm China Quality is currently generating about -0.02 per unit of risk. If you would invest 26,080 in Nasdaq 100 2x Strategy on September 12, 2024 and sell it today you would earn a total of 17,337 from holding Nasdaq 100 2x Strategy or generate 66.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Wcm China Quality
Performance |
| Timeline |
| Nasdaq 100 2x |
| Wcm China Quality |
Nasdaq 100 and Wcm China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Wcm China
The main advantage of trading using opposite Nasdaq 100 and Wcm China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Wcm China 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 Wcm China will offset losses from the drop in Wcm China's long position.| Nasdaq 100 vs. Ambrus Core Bond | Nasdaq 100 vs. Pace High Yield | Nasdaq 100 vs. Franklin High Yield | Nasdaq 100 vs. The National Tax Free |
| Wcm China vs. Vy Jpmorgan Emerging | Wcm China vs. Eagle Mlp Strategy | Wcm China vs. Origin Emerging Markets | Wcm China 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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