Correlation Between Nasdaq-100(r) and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Barings Emerging 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 Barings Emerging 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 Barings Emerging Markets, you can compare the effects of market volatilities on Nasdaq-100(r) and Barings Emerging 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 Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Barings Emerging.
Diversification Opportunities for Nasdaq-100(r) and Barings Emerging
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nasdaq-100(r) and Barings is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Barings Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Emerging Markets 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 Barings Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Emerging Markets has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Barings Emerging go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Barings Emerging
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 7.04 times more return on investment than Barings Emerging. However, Nasdaq-100(r) is 7.04 times more volatile than Barings Emerging Markets. It trades about 0.07 of its potential returns per unit of risk. Barings Emerging Markets is currently generating about 0.07 per unit of risk. If you would invest 47,868 in Nasdaq 100 2x Strategy on August 29, 2024 and sell it today you would earn a total of 9,200 from holding Nasdaq 100 2x Strategy or generate 19.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Barings Emerging Markets
Performance |
| Timeline |
| Nasdaq 100 2x |
| Barings Emerging Markets |
Nasdaq-100(r) and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Barings Emerging
The main advantage of trading using opposite Nasdaq-100(r) and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Barings Emerging 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 Barings Emerging will offset losses from the drop in Barings Emerging's long position.| Nasdaq-100(r) vs. Nasdaq 100 2x Strategy | Nasdaq-100(r) vs. Direxion Monthly Nasdaq 100 | Nasdaq-100(r) vs. Ultranasdaq 100 Profund Ultranasdaq 100 | Nasdaq-100(r) vs. Nasdaq 100 2x Strategy |
| Barings Emerging vs. Fidelity New Markets | Barings Emerging vs. HUMANA INC | Barings Emerging vs. Aquagold International | Barings Emerging vs. Barloworld Ltd ADR |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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