Correlation Between Nasdaq-100(r) and Stadion Tactical
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Stadion Tactical 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 Stadion Tactical 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 Stadion Tactical Growth, you can compare the effects of market volatilities on Nasdaq-100(r) and Stadion Tactical 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 Stadion Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Stadion Tactical.
Diversification Opportunities for Nasdaq-100(r) and Stadion Tactical
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nasdaq-100(r) and Stadion is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Stadion Tactical Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stadion Tactical Growth 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 Stadion Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stadion Tactical Growth has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Stadion Tactical go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Stadion Tactical
Assuming the 90 days horizon Nasdaq-100(r) is expected to generate 1.47 times less return on investment than Stadion Tactical. In addition to that, Nasdaq-100(r) is 2.91 times more volatile than Stadion Tactical Growth. It trades about 0.03 of its total potential returns per unit of risk. Stadion Tactical Growth is currently generating about 0.14 per unit of volatility. If you would invest 1,631 in Stadion Tactical Growth on August 30, 2024 and sell it today you would earn a total of 41.00 from holding Stadion Tactical Growth or generate 2.51% 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. Stadion Tactical Growth
Performance |
| Timeline |
| Nasdaq 100 2x |
| Stadion Tactical Growth |
Nasdaq-100(r) and Stadion Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Stadion Tactical
The main advantage of trading using opposite Nasdaq-100(r) and Stadion Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Stadion Tactical 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 Stadion Tactical will offset losses from the drop in Stadion Tactical'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 |
| Stadion Tactical vs. Stadion Trilogy Alternative | Stadion Tactical vs. Stadion Tactical Defensive | Stadion Tactical vs. Stadion Tactical Defensive | Stadion Tactical vs. Stadion Tactical Defensive |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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