Correlation Between Nasdaq and Hedera Hashgraph

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

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

Diversification Opportunities for Nasdaq and Hedera Hashgraph

0.73

Correlation Coefficient

Nasdaq  Hedera Hashgraph

Poor diversification

The 3 months correlation between Nasdaq and Hedera is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Hedera Hashgraph in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hedera Hashgraph 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 Hedera Hashgraph. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hedera Hashgraph has no effect on the direction of Nasdaq i.e., Nasdaq and Hedera Hashgraph go up and down completely randomly.

Pair Corralation between Nasdaq and Hedera Hashgraph

Given the investment horizon of 90 days Nasdaq is expected to generate 17.95 times less return on investment than Hedera Hashgraph. But when comparing it to its historical volatility, Nasdaq Inc is 14.31 times less risky than Hedera Hashgraph. It trades about 0.2 of its potential returns per unit of risk. Hedera Hashgraph is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  5.24  in Hedera Hashgraph on September 12, 2024 and sell it today you would earn a total of  23.76  from holding Hedera Hashgraph or generate 453.44% return on investment over 90 days.

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

Nasdaq Inc  vs.  Hedera Hashgraph

Nasdaq Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hedera Hashgraph

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hedera Hashgraph are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Hedera Hashgraph exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nasdaq and Hedera Hashgraph

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

The idea behind Nasdaq Inc and Hedera Hashgraph 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.