Correlation Between Nasdaq and HANetf ICAV

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

By analyzing existing cross correlation between Nasdaq Inc and HANetf ICAV , you can compare the effects of market volatilities on Nasdaq and HANetf ICAV 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 Nasdaq with a short position of HANetf ICAV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and HANetf ICAV.

Diversification Opportunities for Nasdaq and HANetf ICAV

-0.05

Correlation Coefficient

Nasdaq  HANetf ICAV

Good diversification

The 3 months correlation between Nasdaq and HANetf is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and HANetf ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANetf ICAV and 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 Nasdaq Inc are associated (or correlated) with HANetf ICAV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANetf ICAV has no effect on the direction of Nasdaq i.e., Nasdaq and HANetf ICAV go up and down completely randomly.

Pair Corralation between Nasdaq and HANetf ICAV

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the HANetf ICAV. But the stock apears to be less risky and, when comparing its historical volatility, Nasdaq Inc is 1.22 times less risky than HANetf ICAV. The stock trades about -0.19 of its potential returns per unit of risk. The HANetf ICAV is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  1,013  in HANetf ICAV on September 27, 2024 and sell it today you would lose (37.00) from holding HANetf ICAV or give up 3.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Nasdaq Inc  vs.  HANetf ICAV

Nasdaq Inc

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.

HANetf ICAV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HANetf ICAV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, HANetf ICAV is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nasdaq and HANetf ICAV

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

The idea behind Nasdaq Inc and HANetf ICAV 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.