Correlation Between Ultra Nasdaq-100 and Cambiar Small
Can any of the company-specific risk be diversified away by investing in both Ultra Nasdaq-100 and Cambiar Small 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 Ultra Nasdaq-100 and Cambiar Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultra Nasdaq 100 Profunds and Cambiar Small Cap, you can compare the effects of market volatilities on Ultra Nasdaq-100 and Cambiar Small 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 Ultra Nasdaq-100 with a short position of Cambiar Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Nasdaq-100 and Cambiar Small.
Diversification Opportunities for Ultra Nasdaq-100 and Cambiar Small
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ultra and Cambiar is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Nasdaq 100 Profunds and Cambiar Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Small Cap and Ultra Nasdaq-100 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 Ultra Nasdaq 100 Profunds are associated (or correlated) with Cambiar Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Small Cap has no effect on the direction of Ultra Nasdaq-100 i.e., Ultra Nasdaq-100 and Cambiar Small go up and down completely randomly.
Pair Corralation between Ultra Nasdaq-100 and Cambiar Small
Assuming the 90 days horizon Ultra Nasdaq 100 Profunds is expected to generate 2.19 times more return on investment than Cambiar Small. However, Ultra Nasdaq-100 is 2.19 times more volatile than Cambiar Small Cap. It trades about 0.09 of its potential returns per unit of risk. Cambiar Small Cap is currently generating about 0.05 per unit of risk. If you would invest 4,440 in Ultra Nasdaq 100 Profunds on August 30, 2024 and sell it today you would earn a total of 6,823 from holding Ultra Nasdaq 100 Profunds or generate 153.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Nasdaq 100 Profunds vs. Cambiar Small Cap
Performance |
| Timeline |
| Ultra Nasdaq 100 |
| Cambiar Small Cap |
Ultra Nasdaq-100 and Cambiar Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Nasdaq-100 and Cambiar Small
The main advantage of trading using opposite Ultra Nasdaq-100 and Cambiar Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Nasdaq-100 position performs unexpectedly, Cambiar Small 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 Cambiar Small will offset losses from the drop in Cambiar Small's long position.The idea behind Ultra Nasdaq 100 Profunds and Cambiar Small Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Cambiar Small vs. Jpmorgan Dynamic Small | Cambiar Small vs. Cambiar Opportunity Fund | Cambiar Small vs. Virtus Emerging Markets | Cambiar Small vs. Cambiar International Equity |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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