Correlation Between Usaa Nasdaq and Aggressive Growth
Can any of the company-specific risk be diversified away by investing in both Usaa Nasdaq and Aggressive Growth 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 Usaa Nasdaq and Aggressive Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Usaa Nasdaq 100 and Aggressive Growth Fund, you can compare the effects of market volatilities on Usaa Nasdaq and Aggressive Growth 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 Usaa Nasdaq with a short position of Aggressive Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usaa Nasdaq and Aggressive Growth.
Diversification Opportunities for Usaa Nasdaq and Aggressive Growth
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Usaa and Aggressive is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Usaa Nasdaq 100 and Aggressive Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Growth and Usaa Nasdaq 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 Usaa Nasdaq 100 are associated (or correlated) with Aggressive Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Growth has no effect on the direction of Usaa Nasdaq i.e., Usaa Nasdaq and Aggressive Growth go up and down completely randomly.
Pair Corralation between Usaa Nasdaq and Aggressive Growth
Assuming the 90 days horizon Usaa Nasdaq is expected to generate 1.24 times less return on investment than Aggressive Growth. But when comparing it to its historical volatility, Usaa Nasdaq 100 is 1.07 times less risky than Aggressive Growth. It trades about 0.07 of its potential returns per unit of risk. Aggressive Growth Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,883 in Aggressive Growth Fund on August 25, 2024 and sell it today you would earn a total of 1,116 from holding Aggressive Growth Fund or generate 18.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Usaa Nasdaq 100 vs. Aggressive Growth Fund
Performance |
| Timeline |
| Usaa Nasdaq 100 |
| Aggressive Growth |
Usaa Nasdaq and Aggressive Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Usaa Nasdaq and Aggressive Growth
The main advantage of trading using opposite Usaa Nasdaq and Aggressive Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usaa Nasdaq position performs unexpectedly, Aggressive Growth 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 Aggressive Growth will offset losses from the drop in Aggressive Growth's long position.| Usaa Nasdaq vs. Aggressive Growth Fund | Usaa Nasdaq vs. International Fund International | Usaa Nasdaq vs. Small Cap Stock | Usaa Nasdaq vs. Income Stock Fund |
| Aggressive Growth vs. International Fund International | Aggressive Growth vs. Small Cap Stock | Aggressive Growth vs. Income Stock Fund | Aggressive Growth vs. Emerging Markets Fund |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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