Correlation Between Nasdaq and 191216CP3

Can any of the company-specific risk be diversified away by investing in both Nasdaq and 191216CP3 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 191216CP3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nasdaq Inc and KO 4125 25 MAR 40, you can compare the effects of market volatilities on Nasdaq and 191216CP3 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 191216CP3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and 191216CP3.

Diversification Opportunities for Nasdaq and 191216CP3

-0.32

Correlation Coefficient

Nasdaq  191216CP3

Very good diversification

The 3 months correlation between Nasdaq and 191216CP3 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and KO 4125 25 MAR 40 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KO 4125 25 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 191216CP3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KO 4125 25 has no effect on the direction of Nasdaq i.e., Nasdaq and 191216CP3 go up and down completely randomly.

Pair Corralation between Nasdaq and 191216CP3

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the 191216CP3. But the stock apears to be less risky and, when comparing its historical volatility, Nasdaq Inc is 1.32 times less risky than 191216CP3. The stock trades about -0.03 of its potential returns per unit of risk. The KO 4125 25 MAR 40 is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  8,691  in KO 4125 25 MAR 40 on December 29, 2024 and sell it today you would earn a total of  567.00  from holding KO 4125 25 MAR 40 or generate 6.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	39.34%
Values	Daily Returns

Nasdaq Inc  vs.  KO 4125 25 MAR 40

Nasdaq Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nasdaq Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

KO 4125 25

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KO 4125 25 MAR 40 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, 191216CP3 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nasdaq and 191216CP3

The main advantage of trading using opposite Nasdaq and 191216CP3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, 191216CP3 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 191216CP3 will offset losses from the drop in 191216CP3's long position.

The idea behind Nasdaq Inc and KO 4125 25 MAR 40 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 Transaction History module to view history of all your transactions and understand their impact on performance.