Correlation Between Ultranasdaq-100 Profund and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both Ultranasdaq-100 Profund 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 Ultranasdaq-100 Profund and Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultranasdaq 100 Profund Ultranasdaq 100 and Nasdaq 100 2x Strategy, you can compare the effects of market volatilities on Ultranasdaq-100 Profund 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 Ultranasdaq-100 Profund with a short position of Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultranasdaq-100 Profund and Nasdaq 100.
Diversification Opportunities for Ultranasdaq-100 Profund and Nasdaq 100
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Ultranasdaq-100 and Nasdaq is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Ultranasdaq 100 Profund Ultran 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 Ultranasdaq-100 Profund 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 Ultranasdaq 100 Profund Ultranasdaq 100 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 Ultranasdaq-100 Profund i.e., Ultranasdaq-100 Profund and Nasdaq 100 go up and down completely randomly.
Pair Corralation between Ultranasdaq-100 Profund and Nasdaq 100
Assuming the 90 days horizon Ultranasdaq-100 Profund is expected to generate 1.03 times less return on investment than Nasdaq 100. But when comparing it to its historical volatility, Ultranasdaq 100 Profund Ultranasdaq 100 is 1.0 times less risky than Nasdaq 100. It trades about 0.07 of its potential returns per unit of risk. Nasdaq 100 2x Strategy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 34,855 in Nasdaq 100 2x Strategy on August 28, 2024 and sell it today you would earn a total of 22,565 from holding Nasdaq 100 2x Strategy or generate 64.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultranasdaq 100 Profund Ultran vs. Nasdaq 100 2x Strategy
Performance |
| Timeline |
| Ultranasdaq 100 Profund |
| Nasdaq 100 2x |
Ultranasdaq-100 Profund and Nasdaq 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultranasdaq-100 Profund and Nasdaq 100
The main advantage of trading using opposite Ultranasdaq-100 Profund and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultranasdaq-100 Profund 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.The idea behind Ultranasdaq 100 Profund Ultranasdaq 100 and Nasdaq 100 2x Strategy 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.
| Nasdaq 100 vs. Direxion Monthly Nasdaq 100 | Nasdaq 100 vs. Ultranasdaq 100 Profund Ultranasdaq 100 | Nasdaq 100 vs. Dow 2x Strategy |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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