Correlation Between Ultra Nasdaq-100 and Russell 2000
Can any of the company-specific risk be diversified away by investing in both Ultra Nasdaq-100 and Russell 2000 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 Russell 2000 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 Russell 2000 2x, you can compare the effects of market volatilities on Ultra Nasdaq-100 and Russell 2000 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 Russell 2000. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Nasdaq-100 and Russell 2000.
Diversification Opportunities for Ultra Nasdaq-100 and Russell 2000
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ultra and Russell is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Nasdaq 100 Profunds and Russell 2000 2x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Russell 2000 2x 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 Russell 2000. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Russell 2000 2x has no effect on the direction of Ultra Nasdaq-100 i.e., Ultra Nasdaq-100 and Russell 2000 go up and down completely randomly.
Pair Corralation between Ultra Nasdaq-100 and Russell 2000
Assuming the 90 days horizon Ultra Nasdaq 100 Profunds is expected to generate 1.15 times more return on investment than Russell 2000. However, Ultra Nasdaq-100 is 1.15 times more volatile than Russell 2000 2x. It trades about -0.01 of its potential returns per unit of risk. Russell 2000 2x is currently generating about -0.08 per unit of risk. If you would invest 11,408 in Ultra Nasdaq 100 Profunds on December 2, 2024 and sell it today you would lose (264.00) from holding Ultra Nasdaq 100 Profunds or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Nasdaq 100 Profunds vs. Russell 2000 2x
Performance |
| Timeline |
| Ultra Nasdaq 100 |
| Russell 2000 2x |
Ultra Nasdaq-100 and Russell 2000 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra Nasdaq-100 and Russell 2000
The main advantage of trading using opposite Ultra Nasdaq-100 and Russell 2000 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Nasdaq-100 position performs unexpectedly, Russell 2000 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 Russell 2000 will offset losses from the drop in Russell 2000's long position.The idea behind Ultra Nasdaq 100 Profunds and Russell 2000 2x 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.
| Russell 2000 vs. T Rowe Price | Russell 2000 vs. Boston Partners Small | Russell 2000 vs. T Rowe Price | Russell 2000 vs. T Rowe Price |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |