Correlation Between Fa 529 and Nasdaq 100

Can any of the company-specific risk be diversified away by investing in both Fa 529 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 Fa 529 and Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fa 529 Aggressive and Nasdaq 100 Fund Investor, you can compare the effects of market volatilities on Fa 529 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 Fa 529 with a short position of Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fa 529 and Nasdaq 100.

Diversification Opportunities for Fa 529 and Nasdaq 100

0.54

Correlation Coefficient

Fa 529  Nasdaq 100

Very weak diversification

The 3 months correlation between FFCGX and Nasdaq is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fa 529 Aggressive and Nasdaq 100 Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Fund and Fa 529 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 Fa 529 Aggressive 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 Fund has no effect on the direction of Fa 529 i.e., Fa 529 and Nasdaq 100 go up and down completely randomly.

Pair Corralation between Fa 529 and Nasdaq 100

Assuming the 90 days horizon Fa 529 Aggressive is expected to generate 0.68 times more return on investment than Nasdaq 100. However, Fa 529 Aggressive is 1.48 times less risky than Nasdaq 100. It trades about 0.03 of its potential returns per unit of risk. Nasdaq 100 Fund Investor is currently generating about -0.07 per unit of risk. If you would invest  3,915  in Fa 529 Aggressive on December 28, 2024 and sell it today you would earn a total of  62.00  from holding Fa 529 Aggressive or generate 1.58% return on investment over 90 days.

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

Fa 529 Aggressive  vs.  Nasdaq 100 Fund Investor

Fa 529 Aggressive

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fa 529 Aggressive are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Fa 529 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nasdaq 100 Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nasdaq 100 Fund Investor has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Nasdaq 100 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fa 529 and Nasdaq 100

The main advantage of trading using opposite Fa 529 and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fa 529 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 Fa 529 Aggressive and Nasdaq 100 Fund Investor 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.