Correlation Between BetaPro NASDAQ and Ether Fund

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

Diversification Opportunities for BetaPro NASDAQ and Ether Fund

0.72

Correlation Coefficient

BetaPro NASDAQ  Ether Fund

Poor diversification

The 3 months correlation between BetaPro and Ether is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and Ether Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ether Fund 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 Ether Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ether Fund has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and Ether Fund go up and down completely randomly.

Pair Corralation between BetaPro NASDAQ and Ether Fund

Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to generate 0.64 times more return on investment than Ether Fund. However, BetaPro NASDAQ 100 2x is 1.56 times less risky than Ether Fund. It trades about -0.08 of its potential returns per unit of risk. Ether Fund is currently generating about -0.16 per unit of risk. If you would invest  2,419  in BetaPro NASDAQ 100 2x on December 28, 2024 and sell it today you would lose (347.00) from holding BetaPro NASDAQ 100 2x or give up 14.34% of portfolio value over 90 days.

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

BetaPro NASDAQ 100 2x  vs.  Ether Fund

BetaPro NASDAQ 100

Risk-Adjusted Performance

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 unfluctuating performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Ether Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ether Fund has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's technical indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with BetaPro NASDAQ and Ether Fund

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

The idea behind BetaPro NASDAQ 100 2x and Ether Fund 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.