Correlation Between Nasdaq 100 and Bull Profund
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Bull Profund 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 Bull Profund 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 Bull Profund Investor, you can compare the effects of market volatilities on Nasdaq 100 and Bull Profund 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 Bull Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Bull Profund.
Diversification Opportunities for Nasdaq 100 and Bull Profund
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nasdaq and Bull is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Bull Profund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bull Profund Investor 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 Bull Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bull Profund Investor has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Bull Profund go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Bull Profund
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 2.8 times more return on investment than Bull Profund. However, Nasdaq 100 is 2.8 times more volatile than Bull Profund Investor. It trades about 0.1 of its potential returns per unit of risk. Bull Profund Investor is currently generating about 0.1 per unit of risk. If you would invest 24,281 in Nasdaq 100 2x Strategy on August 27, 2024 and sell it today you would earn a total of 32,995 from holding Nasdaq 100 2x Strategy or generate 135.89% 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. Bull Profund Investor
Performance |
| Timeline |
| Nasdaq 100 2x |
| Bull Profund Investor |
Nasdaq 100 and Bull Profund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Bull Profund
The main advantage of trading using opposite Nasdaq 100 and Bull Profund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Bull Profund 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 Bull Profund will offset losses from the drop in Bull Profund's long position.| Nasdaq 100 vs. Direxion Monthly Nasdaq 100 | Nasdaq 100 vs. Ultranasdaq 100 Profund Ultranasdaq 100 | Nasdaq 100 vs. Dow 2x Strategy |
| Bull Profund vs. Short Real Estate | Bull Profund vs. Short Real Estate | Bull Profund vs. Large Cap Growth Profund | Bull Profund vs. Profunds Large Cap Growth |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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