Correlation Between Nasdaq 100 and Fisher Investments
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Fisher Investments 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 Fisher Investments 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 Fisher Small Cap, you can compare the effects of market volatilities on Nasdaq 100 and Fisher Investments 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 Fisher Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Fisher Investments.
Diversification Opportunities for Nasdaq 100 and Fisher Investments
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nasdaq and Fisher is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Fisher Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fisher Investments 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 Fisher Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fisher Investments has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Fisher Investments go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Fisher Investments
Assuming the 90 days horizon Nasdaq 100 is expected to generate 2.0 times less return on investment than Fisher Investments. In addition to that, Nasdaq 100 is 1.36 times more volatile than Fisher Small Cap. It trades about 0.08 of its total potential returns per unit of risk. Fisher Small Cap is currently generating about 0.22 per unit of volatility. If you would invest 1,231 in Fisher Small Cap on August 27, 2024 and sell it today you would earn a total of 99.00 from holding Fisher Small Cap or generate 8.04% 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. Fisher Small Cap
Performance |
| Timeline |
| Nasdaq 100 2x |
| Fisher Investments |
Nasdaq 100 and Fisher Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Fisher Investments
The main advantage of trading using opposite Nasdaq 100 and Fisher Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Fisher Investments 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 Fisher Investments will offset losses from the drop in Fisher Investments' long position.| Nasdaq 100 vs. Sp 500 2x | Nasdaq 100 vs. Inverse Nasdaq 100 2x | Nasdaq 100 vs. Inverse Sp 500 | Nasdaq 100 vs. Ultra Nasdaq 100 Profunds |
| Fisher Investments vs. Fisher Large Cap | Fisher Investments vs. Tactical Multi Purpose Fund | Fisher Investments vs. Nasdaq 100 2x Strategy | Fisher Investments vs. Small Cap Core |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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