Correlation Between Nasdaq-100(r) and Driehaus Event
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Driehaus Event 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 Driehaus Event 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 Driehaus Event Driven, you can compare the effects of market volatilities on Nasdaq-100(r) and Driehaus Event 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 Driehaus Event. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Driehaus Event.
Diversification Opportunities for Nasdaq-100(r) and Driehaus Event
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nasdaq-100(r) and Driehaus is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Driehaus Event Driven in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Driehaus Event Driven 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 Driehaus Event. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Driehaus Event Driven has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Driehaus Event go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Driehaus Event
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 6.26 times more return on investment than Driehaus Event. However, Nasdaq-100(r) is 6.26 times more volatile than Driehaus Event Driven. It trades about 0.2 of its potential returns per unit of risk. Driehaus Event Driven is currently generating about 0.2 per unit of risk. If you would invest 52,748 in Nasdaq 100 2x Strategy on September 1, 2024 and sell it today you would earn a total of 4,302 from holding Nasdaq 100 2x Strategy or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Driehaus Event Driven
Performance |
| Timeline |
| Nasdaq 100 2x |
| Driehaus Event Driven |
Nasdaq-100(r) and Driehaus Event Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Driehaus Event
The main advantage of trading using opposite Nasdaq-100(r) and Driehaus Event positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Driehaus Event 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 Driehaus Event will offset losses from the drop in Driehaus Event's long position.| Nasdaq-100(r) vs. Sp 500 2x | Nasdaq-100(r) vs. Inverse Nasdaq 100 2x | Nasdaq-100(r) vs. Inverse Sp 500 | Nasdaq-100(r) vs. Ultra Nasdaq 100 Profunds |
| Driehaus Event vs. Riverpark Strategic Income | Driehaus Event vs. Riverpark Strategic Income | Driehaus Event vs. Wasatch Frontier Emerging | Driehaus Event vs. Touchstone Focused Fund |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |