Correlation Between Nasdaq 100 and Inverse Sp
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Inverse Sp 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 Inverse Sp 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 Inverse Sp 500, you can compare the effects of market volatilities on Nasdaq 100 and Inverse Sp 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 Inverse Sp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Inverse Sp.
Diversification Opportunities for Nasdaq 100 and Inverse Sp
-0.98 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nasdaq and Inverse is -0.98. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Inverse Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse Sp 500 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 Inverse Sp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse Sp 500 has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Inverse Sp go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Inverse Sp
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to generate 0.73 times more return on investment than Inverse Sp. However, Nasdaq 100 Index Fund is 1.37 times less risky than Inverse Sp. It trades about 0.1 of its potential returns per unit of risk. Inverse Sp 500 is currently generating about -0.1 per unit of risk. If you would invest 4,184 in Nasdaq 100 Index Fund on September 12, 2024 and sell it today you would earn a total of 1,290 from holding Nasdaq 100 Index Fund or generate 30.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Inverse Sp 500
Performance |
| Timeline |
| Nasdaq 100 Index |
| Inverse Sp 500 |
Nasdaq 100 and Inverse Sp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Inverse Sp
The main advantage of trading using opposite Nasdaq 100 and Inverse Sp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Inverse Sp 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 Inverse Sp will offset losses from the drop in Inverse Sp's long position.| Nasdaq 100 vs. American Funds The | Nasdaq 100 vs. American Funds The | Nasdaq 100 vs. Growth Fund Of | Nasdaq 100 vs. Growth Fund Of |
| Inverse Sp vs. Commonwealth Global Fund | Inverse Sp vs. T Rowe Price | Inverse Sp vs. Nasdaq 100 Index Fund | Inverse Sp vs. Issachar Fund Class |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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