Correlation Between Usaa Nasdaq and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Usaa Nasdaq and Emerging Markets 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 Emerging Markets 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 Emerging Markets Fund, you can compare the effects of market volatilities on Usaa Nasdaq and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usaa Nasdaq and Emerging Markets.
Diversification Opportunities for Usaa Nasdaq and Emerging Markets
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Usaa and Emerging is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Usaa Nasdaq 100 and Emerging Markets Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets has no effect on the direction of Usaa Nasdaq i.e., Usaa Nasdaq and Emerging Markets go up and down completely randomly.
Pair Corralation between Usaa Nasdaq and Emerging Markets
Assuming the 90 days horizon Usaa Nasdaq 100 is expected to generate 1.12 times more return on investment than Emerging Markets. However, Usaa Nasdaq is 1.12 times more volatile than Emerging Markets Fund. It trades about 0.08 of its potential returns per unit of risk. Emerging Markets Fund is currently generating about -0.05 per unit of risk. If you would invest 4,957 in Usaa Nasdaq 100 on September 21, 2024 and sell it today you would earn a total of 482.00 from holding Usaa Nasdaq 100 or generate 9.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Usaa Nasdaq 100 vs. Emerging Markets Fund
Performance |
| Timeline |
| Usaa Nasdaq 100 |
| Emerging Markets |
Usaa Nasdaq and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Usaa Nasdaq and Emerging Markets
The main advantage of trading using opposite Usaa Nasdaq and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usaa Nasdaq position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Usaa Nasdaq vs. Income Fund Income | Usaa Nasdaq vs. Victory Diversified Stock | Usaa Nasdaq vs. Intermediate Term Bond Fund | Usaa Nasdaq vs. Usaa Intermediate Term |
| Emerging Markets vs. Income Fund Income | Emerging Markets vs. Usaa Nasdaq 100 | Emerging Markets vs. Victory Diversified Stock | Emerging Markets vs. Intermediate Term Bond 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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