Correlation Between BetaPro NASDAQ and Fidelity Advantage

Can any of the company-specific risk be diversified away by investing in both BetaPro NASDAQ and Fidelity Advantage 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 Fidelity Advantage 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 Fidelity Advantage Bitcoin, you can compare the effects of market volatilities on BetaPro NASDAQ and Fidelity Advantage 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 Fidelity Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro NASDAQ and Fidelity Advantage.

Diversification Opportunities for BetaPro NASDAQ and Fidelity Advantage

-0.45

Correlation Coefficient

BetaPro NASDAQ  Fidelity Advantage

Very good diversification

The 3 months correlation between BetaPro and Fidelity is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and Fidelity Advantage Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advantage 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 Fidelity Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advantage has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and Fidelity Advantage go up and down completely randomly.

Pair Corralation between BetaPro NASDAQ and Fidelity Advantage

Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to generate 0.84 times more return on investment than Fidelity Advantage. However, BetaPro NASDAQ 100 2x is 1.19 times less risky than Fidelity Advantage. It trades about 0.05 of its potential returns per unit of risk. Fidelity Advantage Bitcoin is currently generating about -0.04 per unit of risk. If you would invest  1,032  in BetaPro NASDAQ 100 2x on December 1, 2024 and sell it today you would earn a total of  59.00  from holding BetaPro NASDAQ 100 2x or generate 5.72% return on investment over 90 days.

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

BetaPro NASDAQ 100 2x  vs.  Fidelity Advantage Bitcoin

BetaPro NASDAQ 100

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BetaPro NASDAQ 100 2x are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, BetaPro NASDAQ may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Fidelity Advantage

Risk-Adjusted Performance

Very Weak

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

Pair Trading with BetaPro NASDAQ and Fidelity Advantage

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

The idea behind BetaPro NASDAQ 100 2x and Fidelity Advantage Bitcoin 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.