Correlation Between Nasdaq and Leviathan Gold

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

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

Diversification Opportunities for Nasdaq and Leviathan Gold

-0.22

Correlation Coefficient

Nasdaq  Leviathan Gold

Very good diversification

The 3 months correlation between Nasdaq and Leviathan is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Leviathan Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leviathan Gold 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 Leviathan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leviathan Gold has no effect on the direction of Nasdaq i.e., Nasdaq and Leviathan Gold go up and down completely randomly.

Pair Corralation between Nasdaq and Leviathan Gold

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.16 times more return on investment than Leviathan Gold. However, Nasdaq Inc is 6.44 times less risky than Leviathan Gold. It trades about -0.17 of its potential returns per unit of risk. Leviathan Gold is currently generating about -0.33 per unit of risk. If you would invest  8,114  in Nasdaq Inc on October 7, 2024 and sell it today you would lose (292.00) from holding Nasdaq Inc or give up 3.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Nasdaq Inc  vs.  Leviathan Gold

Nasdaq Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 12 (%) 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.

Leviathan Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Leviathan Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Nasdaq and Leviathan Gold

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

The idea behind Nasdaq Inc and Leviathan Gold 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.