Correlation Between Precious Metals and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both Precious Metals and Nasdaq 100 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 Precious Metals and Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precious Metals And and Nasdaq 100 2x Strategy, you can compare the effects of market volatilities on Precious Metals and Nasdaq 100 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 Precious Metals with a short position of Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precious Metals and Nasdaq 100.
Diversification Opportunities for Precious Metals and Nasdaq 100
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Precious and Nasdaq is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Precious Metals And and Nasdaq 100 2x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 2x and Precious Metals 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 Precious Metals And are associated (or correlated) with Nasdaq 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 2x has no effect on the direction of Precious Metals i.e., Precious Metals and Nasdaq 100 go up and down completely randomly.
Pair Corralation between Precious Metals and Nasdaq 100
Assuming the 90 days horizon Precious Metals And is expected to under-perform the Nasdaq 100. In addition to that, Precious Metals is 1.04 times more volatile than Nasdaq 100 2x Strategy. It trades about -0.11 of its total potential returns per unit of risk. Nasdaq 100 2x Strategy is currently generating about 0.33 per unit of volatility. If you would invest 38,210 in Nasdaq 100 2x Strategy on September 5, 2024 and sell it today you would earn a total of 5,745 from holding Nasdaq 100 2x Strategy or generate 15.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Precious Metals And vs. Nasdaq 100 2x Strategy
Performance |
| Timeline |
| Precious Metals And |
| Nasdaq 100 2x |
Precious Metals and Nasdaq 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precious Metals and Nasdaq 100
The main advantage of trading using opposite Precious Metals and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precious Metals position performs unexpectedly, Nasdaq 100 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 Nasdaq 100 will offset losses from the drop in Nasdaq 100's long position.| Precious Metals vs. Salient Mlp Energy | Precious Metals vs. Tortoise Energy Independence | Precious Metals vs. Gmo Resources | Precious Metals vs. Energy Basic Materials |
| Nasdaq 100 vs. Gabelli Gold Fund | Nasdaq 100 vs. Precious Metals And | Nasdaq 100 vs. Vy Goldman Sachs | Nasdaq 100 vs. James Balanced Golden |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |