Correlation Between BetaPro NASDAQ and Fidelity Low

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

Diversification Opportunities for BetaPro NASDAQ and Fidelity Low

-0.8

Correlation Coefficient

BetaPro NASDAQ  Fidelity Low

Pay attention - limited upside

The 3 months correlation between BetaPro and Fidelity is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and Fidelity Low Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Low Volatility 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 Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Low Volatility has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and Fidelity Low go up and down completely randomly.

Pair Corralation between BetaPro NASDAQ and Fidelity Low

Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to generate 3.97 times more return on investment than Fidelity Low. However, BetaPro NASDAQ is 3.97 times more volatile than Fidelity Low Volatility. It trades about -0.01 of its potential returns per unit of risk. Fidelity Low Volatility is currently generating about -0.2 per unit of risk. If you would invest  1,007  in BetaPro NASDAQ 100 2x on October 9, 2024 and sell it today you would lose (13.00) from holding BetaPro NASDAQ 100 2x or give up 1.29% of portfolio value over 90 days.

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

BetaPro NASDAQ 100 2x  vs.  Fidelity Low Volatility

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.

Fidelity Low Volatility

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Low Volatility are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Fidelity Low is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BetaPro NASDAQ and Fidelity Low

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

The idea behind BetaPro NASDAQ 100 2x and Fidelity Low Volatility 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 CEOs Directory module to screen CEOs from public companies around the world.