Correlation Between Nasdaq 100 and Pnc Emerging
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Pnc 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 and Pnc 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 Pnc Emerging Markets, you can compare the effects of market volatilities on Nasdaq 100 and Pnc 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 with a short position of Pnc Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Pnc Emerging.
Diversification Opportunities for Nasdaq 100 and Pnc Emerging
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nasdaq and Pnc is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Pnc Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pnc Emerging Markets 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 Pnc Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pnc Emerging Markets has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Pnc Emerging go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Pnc Emerging
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 2.35 times more return on investment than Pnc Emerging. However, Nasdaq 100 is 2.35 times more volatile than Pnc Emerging Markets. It trades about 0.1 of its potential returns per unit of risk. Pnc Emerging Markets is currently generating about 0.04 per unit of risk. If you would invest 21,074 in Nasdaq 100 2x Strategy on August 28, 2024 and sell it today you would earn a total of 36,346 from holding Nasdaq 100 2x Strategy or generate 172.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Pnc Emerging Markets
Performance |
| Timeline |
| Nasdaq 100 2x |
| Pnc Emerging Markets |
Nasdaq 100 and Pnc Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Pnc Emerging
The main advantage of trading using opposite Nasdaq 100 and Pnc Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Pnc 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 Pnc Emerging will offset losses from the drop in Pnc Emerging's long position.| Nasdaq 100 vs. Direxion Monthly Nasdaq 100 | Nasdaq 100 vs. Ultranasdaq 100 Profund Ultranasdaq 100 | Nasdaq 100 vs. Dow 2x Strategy |
| Pnc Emerging vs. Federated Emerging Market | Pnc Emerging vs. Federated Mdt All | Pnc Emerging vs. Federated Mdt Balanced | Pnc Emerging vs. Federated Global Allocation |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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