Correlation Between Nasdaq-100(r) and Frost Low
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Frost Low 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 Frost Low 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 Frost Low Duration, you can compare the effects of market volatilities on Nasdaq-100(r) and Frost Low 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 Frost Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Frost Low.
Diversification Opportunities for Nasdaq-100(r) and Frost Low
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nasdaq-100(r) and Frost is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Frost Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Low Duration 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 Frost Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Low Duration has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Frost Low go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Frost Low
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 13.7 times more return on investment than Frost Low. However, Nasdaq-100(r) is 13.7 times more volatile than Frost Low Duration. It trades about 0.2 of its potential returns per unit of risk. Frost Low Duration is currently generating about 0.03 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Frost Low Duration
Performance |
| Timeline |
| Nasdaq 100 2x |
| Frost Low Duration |
Nasdaq-100(r) and Frost Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Frost Low
The main advantage of trading using opposite Nasdaq-100(r) and Frost Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Frost Low 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 Frost Low will offset losses from the drop in Frost Low'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 |
| Frost Low vs. Dunham Porategovernment Bond | Frost Low vs. Fidelity Series Government | Frost Low vs. Ab Government Exchange | Frost Low vs. Us Government Securities |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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