Correlation Between Nasdaq-100(r) and Origin Emerging
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Origin 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 Origin 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 Origin Emerging Markets, you can compare the effects of market volatilities on Nasdaq-100(r) and Origin 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 Origin Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Origin Emerging.
Diversification Opportunities for Nasdaq-100(r) and Origin Emerging
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nasdaq-100(r) and Origin is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Origin Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin 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 Origin Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Emerging Markets has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Origin Emerging go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Origin Emerging
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 2.29 times more return on investment than Origin Emerging. However, Nasdaq-100(r) is 2.29 times more volatile than Origin Emerging Markets. It trades about 0.07 of its potential returns per unit of risk. Origin Emerging Markets is currently generating about -0.01 per unit of risk. If you would invest 48,171 in Nasdaq 100 2x Strategy on September 1, 2024 and sell it today you would earn a total of 9,890 from holding Nasdaq 100 2x Strategy or generate 20.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Origin Emerging Markets
Performance |
| Timeline |
| Nasdaq 100 2x |
| Origin Emerging Markets |
Nasdaq-100(r) and Origin Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Origin Emerging
The main advantage of trading using opposite Nasdaq-100(r) and Origin Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Origin 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 Origin Emerging will offset losses from the drop in Origin 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 |
| Origin Emerging vs. Meeder Funds | Origin Emerging vs. Dws Government Money | Origin Emerging vs. Lord Abbett Govt | Origin Emerging vs. Ashmore Emerging Markets |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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