Correlation Between Nasdaq-100(r) and Realestaterealreturn
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Realestaterealreturn 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 Realestaterealreturn 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 Realestaterealreturn Strategy Fund, you can compare the effects of market volatilities on Nasdaq-100(r) and Realestaterealreturn 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 Realestaterealreturn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Realestaterealreturn.
Diversification Opportunities for Nasdaq-100(r) and Realestaterealreturn
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nasdaq-100(r) and Realestaterealreturn is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Realestaterealreturn Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realestaterealreturn 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 Realestaterealreturn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realestaterealreturn has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Realestaterealreturn go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Realestaterealreturn
Assuming the 90 days horizon Nasdaq-100(r) is expected to generate 2.27 times less return on investment than Realestaterealreturn. But when comparing it to its historical volatility, Nasdaq 100 2x Strategy is 6.33 times less risky than Realestaterealreturn. It trades about 0.1 of its potential returns per unit of risk. Realestaterealreturn Strategy Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,227 in Realestaterealreturn Strategy Fund on November 1, 2024 and sell it today you would earn a total of 441.00 from holding Realestaterealreturn Strategy Fund or generate 19.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Realestaterealreturn Strategy
Performance |
| Timeline |
| Nasdaq 100 2x |
| Realestaterealreturn |
Nasdaq-100(r) and Realestaterealreturn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Realestaterealreturn
The main advantage of trading using opposite Nasdaq-100(r) and Realestaterealreturn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Realestaterealreturn 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 Realestaterealreturn will offset losses from the drop in Realestaterealreturn'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 |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |