Correlation Between Cooper Stnd and Nasdaq

Can any of the company-specific risk be diversified away by investing in both Cooper Stnd and Nasdaq 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 Cooper Stnd and Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cooper Stnd and Nasdaq Inc, you can compare the effects of market volatilities on Cooper Stnd and Nasdaq 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 Cooper Stnd with a short position of Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cooper Stnd and Nasdaq.

Diversification Opportunities for Cooper Stnd and Nasdaq

0.44

Correlation Coefficient

Cooper Stnd  Nasdaq

Very weak diversification

The 3 months correlation between Cooper and Nasdaq is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cooper Stnd and Nasdaq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq Inc and Cooper Stnd 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 Cooper Stnd are associated (or correlated) with Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq Inc has no effect on the direction of Cooper Stnd i.e., Cooper Stnd and Nasdaq go up and down completely randomly.

Pair Corralation between Cooper Stnd and Nasdaq

Considering the 90-day investment horizon Cooper Stnd is expected to generate 2.53 times less return on investment than Nasdaq. In addition to that, Cooper Stnd is 3.35 times more volatile than Nasdaq Inc. It trades about 0.01 of its total potential returns per unit of risk. Nasdaq Inc is currently generating about 0.11 per unit of volatility. If you would invest  5,739  in Nasdaq Inc on October 20, 2024 and sell it today you would earn a total of  2,144  from holding Nasdaq Inc or generate 37.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Cooper Stnd  vs.  Nasdaq Inc

Cooper Stnd

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cooper Stnd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Cooper Stnd unveiled solid returns over the last few months and may actually be approaching a breakup point.

Nasdaq Inc

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cooper Stnd and Nasdaq

The main advantage of trading using opposite Cooper Stnd and Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cooper Stnd position performs unexpectedly, Nasdaq 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 will offset losses from the drop in Nasdaq's long position.

The idea behind Cooper Stnd and Nasdaq Inc 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.