Correlation Between Nasdaq and ZKB Platinum

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

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

Diversification Opportunities for Nasdaq and ZKB Platinum

-0.35

Correlation Coefficient

Nasdaq  ZKB Platinum

Very good diversification

The 3 months correlation between Nasdaq and ZKB is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and ZKB Platinum ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZKB Platinum ETF 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 ZKB Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZKB Platinum ETF has no effect on the direction of Nasdaq i.e., Nasdaq and ZKB Platinum go up and down completely randomly.

Pair Corralation between Nasdaq and ZKB Platinum

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the ZKB Platinum. But the stock apears to be less risky and, when comparing its historical volatility, Nasdaq Inc is 1.15 times less risky than ZKB Platinum. The stock trades about -0.25 of its potential returns per unit of risk. The ZKB Platinum ETF is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  24,550  in ZKB Platinum ETF on September 30, 2024 and sell it today you would lose (345.00) from holding ZKB Platinum ETF or give up 1.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Nasdaq Inc  vs.  ZKB Platinum ETF

Nasdaq Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 9 (%) 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.

ZKB Platinum ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZKB Platinum ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ZKB Platinum is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Nasdaq and ZKB Platinum

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

The idea behind Nasdaq Inc and ZKB Platinum ETF 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.