Correlation Between Nasdaq-100(r) and Teton Convertible
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Teton Convertible 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 Teton Convertible 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 Teton Vertible Securities, you can compare the effects of market volatilities on Nasdaq-100(r) and Teton Convertible 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 Teton Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Teton Convertible.
Diversification Opportunities for Nasdaq-100(r) and Teton Convertible
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nasdaq-100(r) and Teton is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Teton Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Vertible Securities 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 Teton Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teton Vertible Securities has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Teton Convertible go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Teton Convertible
Assuming the 90 days horizon Nasdaq-100(r) is expected to generate 2.46 times less return on investment than Teton Convertible. In addition to that, Nasdaq-100(r) is 3.36 times more volatile than Teton Vertible Securities. It trades about 0.07 of its total potential returns per unit of risk. Teton Vertible Securities is currently generating about 0.56 per unit of volatility. If you would invest 1,241 in Teton Vertible Securities on August 31, 2024 and sell it today you would earn a total of 105.00 from holding Teton Vertible Securities or generate 8.46% 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. Teton Vertible Securities
Performance |
| Timeline |
| Nasdaq 100 2x |
| Teton Vertible Securities |
Nasdaq-100(r) and Teton Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Teton Convertible
The main advantage of trading using opposite Nasdaq-100(r) and Teton Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Teton Convertible 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 Teton Convertible will offset losses from the drop in Teton Convertible'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 |
| Teton Convertible vs. Teton Westwood Small | Teton Convertible vs. Teton Westwood Equity | Teton Convertible vs. Teton Westwood Mighty | Teton Convertible vs. State Street Institutional |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |