Correlation Between Nasdaq 100 and Polen Us
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Polen Us 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 Polen Us 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 Polen Small Pany, you can compare the effects of market volatilities on Nasdaq 100 and Polen Us 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 Polen Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Polen Us.
Diversification Opportunities for Nasdaq 100 and Polen Us
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nasdaq and Polen is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Polen Small Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Small Pany 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 Polen Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen Small Pany has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Polen Us go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Polen Us
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 1.8 times more return on investment than Polen Us. However, Nasdaq 100 is 1.8 times more volatile than Polen Small Pany. It trades about 0.1 of its potential returns per unit of risk. Polen Small Pany is currently generating about 0.03 per unit of risk. If you would invest 20,494 in Nasdaq 100 2x Strategy on October 9, 2024 and sell it today you would earn a total of 36,155 from holding Nasdaq 100 2x Strategy or generate 176.42% 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. Polen Small Pany
Performance |
| Timeline |
| Nasdaq 100 2x |
| Polen Small Pany |
Nasdaq 100 and Polen Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Polen Us
The main advantage of trading using opposite Nasdaq 100 and Polen Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Polen Us 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 Polen Us will offset losses from the drop in Polen Us' 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 |
| Polen Us vs. Prnpl Inv Fd | Polen Us vs. Polen Global Growth | Polen Us vs. Polen Global Growth | Polen Us vs. Polen International Growth |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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