Correlation Between Usaa Nasdaq and Extended Market
Can any of the company-specific risk be diversified away by investing in both Usaa Nasdaq and Extended Market 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 Extended Market 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 Extended Market Index, you can compare the effects of market volatilities on Usaa Nasdaq and Extended Market 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 Extended Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usaa Nasdaq and Extended Market.
Diversification Opportunities for Usaa Nasdaq and Extended Market
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Usaa and Extended is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Usaa Nasdaq 100 and Extended Market Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extended Market Index 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 Extended Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extended Market Index has no effect on the direction of Usaa Nasdaq i.e., Usaa Nasdaq and Extended Market go up and down completely randomly.
Pair Corralation between Usaa Nasdaq and Extended Market
Assuming the 90 days horizon Usaa Nasdaq is expected to generate 1.11 times less return on investment than Extended Market. In addition to that, Usaa Nasdaq is 1.04 times more volatile than Extended Market Index. It trades about 0.07 of its total potential returns per unit of risk. Extended Market Index is currently generating about 0.08 per unit of volatility. If you would invest 2,119 in Extended Market Index on August 27, 2024 and sell it today you would earn a total of 371.00 from holding Extended Market Index or generate 17.51% 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. Extended Market Index
Performance |
| Timeline |
| Usaa Nasdaq 100 |
| Extended Market Index |
Usaa Nasdaq and Extended Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Usaa Nasdaq and Extended Market
The main advantage of trading using opposite Usaa Nasdaq and Extended Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usaa Nasdaq position performs unexpectedly, Extended Market 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 Extended Market will offset losses from the drop in Extended Market's long position.| Usaa Nasdaq vs. International Fund International | Usaa Nasdaq vs. Small Cap Stock | Usaa Nasdaq vs. Income Stock Fund | Usaa Nasdaq vs. Emerging Markets Fund |
| Extended Market vs. Income Fund Income | Extended Market vs. Usaa Nasdaq 100 | Extended Market vs. Victory Diversified Stock | Extended Market 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |