Correlation Between Nasdaq 100 and Falling Dollar

Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Falling Dollar 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 100 and Falling Dollar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nasdaq 100 Profund Nasdaq 100 and Falling Dollar Profund, you can compare the effects of market volatilities on Nasdaq 100 and Falling Dollar 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 100 with a short position of Falling Dollar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Falling Dollar.

Diversification Opportunities for Nasdaq 100 and Falling Dollar

-0.82

Correlation Coefficient

Nasdaq 100  Falling Dollar

Pay attention - limited upside

The 3 months correlation between Nasdaq and Falling is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Profund Nasdaq 100 and Falling Dollar Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falling Dollar Profund and Nasdaq 100 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 100 Profund Nasdaq 100 are associated (or correlated) with Falling Dollar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falling Dollar Profund has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Falling Dollar go up and down completely randomly.

Pair Corralation between Nasdaq 100 and Falling Dollar

Assuming the 90 days horizon Nasdaq 100 Profund Nasdaq 100 is expected to generate 2.73 times more return on investment than Falling Dollar. However, Nasdaq 100 is 2.73 times more volatile than Falling Dollar Profund. It trades about 0.19 of its potential returns per unit of risk. Falling Dollar Profund is currently generating about 0.0 per unit of risk. If you would invest  3,446  in Nasdaq 100 Profund Nasdaq 100 on September 15, 2024 and sell it today you would earn a total of  139.00  from holding Nasdaq 100 Profund Nasdaq 100 or generate 4.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Nasdaq 100 Profund Nasdaq 100  vs.  Falling Dollar Profund

Nasdaq 100 Profund

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq 100 Profund Nasdaq 100 are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Nasdaq 100 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Falling Dollar Profund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Falling Dollar Profund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Falling Dollar is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nasdaq 100 and Falling Dollar

The main advantage of trading using opposite Nasdaq 100 and Falling Dollar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Falling Dollar 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 Falling Dollar will offset losses from the drop in Falling Dollar's long position.

The idea behind Nasdaq 100 Profund Nasdaq 100 and Falling Dollar Profund 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.