Correlation Between Nasdaq and SSIAM VNFIN

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

By analyzing existing cross correlation between Nasdaq Inc and SSIAM VNFIN LEAD, you can compare the effects of market volatilities on Nasdaq and SSIAM VNFIN 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 SSIAM VNFIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and SSIAM VNFIN.

Diversification Opportunities for Nasdaq and SSIAM VNFIN

-0.71

Correlation Coefficient

Nasdaq  SSIAM VNFIN

Pay attention - limited upside

The 3 months correlation between Nasdaq and SSIAM is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and SSIAM VNFIN LEAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSIAM VNFIN LEAD 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 SSIAM VNFIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSIAM VNFIN LEAD has no effect on the direction of Nasdaq i.e., Nasdaq and SSIAM VNFIN go up and down completely randomly.

Pair Corralation between Nasdaq and SSIAM VNFIN

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.94 times more return on investment than SSIAM VNFIN. However, Nasdaq Inc is 1.06 times less risky than SSIAM VNFIN. It trades about 0.14 of its potential returns per unit of risk. SSIAM VNFIN LEAD is currently generating about -0.03 per unit of risk. If you would invest  7,198  in Nasdaq Inc on October 8, 2024 and sell it today you would earn a total of  624.00  from holding Nasdaq Inc or generate 8.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Nasdaq Inc  vs.  SSIAM VNFIN LEAD

Nasdaq Inc

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 10 (%) 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 February 2025.

SSIAM VNFIN LEAD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSIAM VNFIN LEAD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SSIAM VNFIN is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nasdaq and SSIAM VNFIN

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

The idea behind Nasdaq Inc and SSIAM VNFIN LEAD 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.