Correlation Between Nasdaq 100 and Auer Growth
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Auer Growth 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 Nasdaq 100 and Auer Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Index Fund and Auer Growth Fund, you can compare the effects of market volatilities on Nasdaq 100 and Auer Growth 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 Nasdaq 100 with a short position of Auer Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Auer Growth.
Diversification Opportunities for Nasdaq 100 and Auer Growth
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nasdaq and Auer is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Auer Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auer Growth Fund and 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 Nasdaq 100 Index Fund are associated (or correlated) with Auer Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auer Growth Fund has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Auer Growth go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Auer Growth
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to generate 1.14 times more return on investment than Auer Growth. However, Nasdaq 100 is 1.14 times more volatile than Auer Growth Fund. It trades about 0.08 of its potential returns per unit of risk. Auer Growth Fund is currently generating about 0.05 per unit of risk. If you would invest 4,664 in Nasdaq 100 Index Fund on August 31, 2024 and sell it today you would earn a total of 551.00 from holding Nasdaq 100 Index Fund or generate 11.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Auer Growth Fund
Performance |
| Timeline |
| Nasdaq 100 Index |
| Auer Growth Fund |
Nasdaq 100 and Auer Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Auer Growth
The main advantage of trading using opposite Nasdaq 100 and Auer Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Auer Growth 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 Auer Growth will offset losses from the drop in Auer Growth's long position.| Nasdaq 100 vs. Europacific Growth Fund | Nasdaq 100 vs. Washington Mutual Investors | Nasdaq 100 vs. Capital World Growth | Nasdaq 100 vs. HUMANA INC |
| Auer Growth vs. Lebenthal Lisanti Small | Auer Growth vs. Hodges Small Cap | Auer Growth vs. Schwartz Value Focused | Auer Growth vs. Oberweis Small Cap Opportunities |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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