Correlation Between BetaPro NASDAQ and CI Galaxy

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

By analyzing existing cross correlation between BetaPro NASDAQ 100 2x and CI Galaxy Multi Crypto, you can compare the effects of market volatilities on BetaPro NASDAQ and CI Galaxy 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 BetaPro NASDAQ with a short position of CI Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro NASDAQ and CI Galaxy.

Diversification Opportunities for BetaPro NASDAQ and CI Galaxy

-0.91

Correlation Coefficient

BetaPro NASDAQ  CI Galaxy

Pay attention - limited upside

The 3 months correlation between BetaPro and CMCX-B is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and CI Galaxy Multi Crypto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Galaxy Multi and BetaPro NASDAQ 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 BetaPro NASDAQ 100 2x are associated (or correlated) with CI Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Galaxy Multi has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and CI Galaxy go up and down completely randomly.

Pair Corralation between BetaPro NASDAQ and CI Galaxy

Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to under-perform the CI Galaxy. But the etf apears to be less risky and, when comparing its historical volatility, BetaPro NASDAQ 100 2x is 1.47 times less risky than CI Galaxy. The etf trades about -0.08 of its potential returns per unit of risk. The CI Galaxy Multi Crypto is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,061  in CI Galaxy Multi Crypto on October 9, 2024 and sell it today you would earn a total of  504.00  from holding CI Galaxy Multi Crypto or generate 47.5% return on investment over 90 days.

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

BetaPro NASDAQ 100 2x  vs.  CI Galaxy Multi Crypto

BetaPro NASDAQ 100

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BetaPro NASDAQ 100 2x has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

CI Galaxy Multi

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CI Galaxy Multi Crypto are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, CI Galaxy sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BetaPro NASDAQ and CI Galaxy

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

The idea behind BetaPro NASDAQ 100 2x and CI Galaxy Multi Crypto 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.