Correlation Between Nova Fund and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both Nova Fund and Nasdaq 100 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 Nova Fund and Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nova Fund Class and Nasdaq 100 Fund Class, you can compare the effects of market volatilities on Nova Fund and Nasdaq 100 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 Nova Fund with a short position of Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nova Fund and Nasdaq 100.
Diversification Opportunities for Nova Fund and Nasdaq 100
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nova and Nasdaq is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Nova Fund Class and Nasdaq 100 Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Fund and Nova Fund 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 Nova Fund Class are associated (or correlated) with Nasdaq 100. 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 Nova Fund i.e., Nova Fund and Nasdaq 100 go up and down completely randomly.
Pair Corralation between Nova Fund and Nasdaq 100
Assuming the 90 days horizon Nova Fund is expected to generate 1.38 times less return on investment than Nasdaq 100. In addition to that, Nova Fund is 1.29 times more volatile than Nasdaq 100 Fund Class. It trades about 0.04 of its total potential returns per unit of risk. Nasdaq 100 Fund Class is currently generating about 0.07 per unit of volatility. If you would invest 4,050 in Nasdaq 100 Fund Class on September 3, 2024 and sell it today you would earn a total of 2,119 from holding Nasdaq 100 Fund Class or generate 52.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nova Fund Class vs. Nasdaq 100 Fund Class
Performance |
| Timeline |
| Nova Fund Class |
| Nasdaq 100 Fund |
Nova Fund and Nasdaq 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nova Fund and Nasdaq 100
The main advantage of trading using opposite Nova Fund and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nova Fund position performs unexpectedly, Nasdaq 100 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 will offset losses from the drop in Nasdaq 100's long position.| Nova Fund vs. Internet Ultrasector Profund | Nova Fund vs. Semiconductor Ultrasector Profund | Nova Fund vs. Pharmaceuticals Ultrasector Profund |
| Nasdaq 100 vs. Nasdaq 100 2x Strategy | Nasdaq 100 vs. Nova Fund Class | Nasdaq 100 vs. Russell 2000 15x | Nasdaq 100 vs. Nasdaq 100 Fund Class |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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