Correlation Between Nasdaq-100(r) and Bull Profund
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Bull Profund 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(r) and Bull Profund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Bull Profund Investor, you can compare the effects of market volatilities on Nasdaq-100(r) and Bull Profund 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(r) with a short position of Bull Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Bull Profund.
Diversification Opportunities for Nasdaq-100(r) and Bull Profund
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nasdaq-100(r) and Bull is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Bull Profund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bull Profund Investor and Nasdaq-100(r) 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 2x Strategy are associated (or correlated) with Bull Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bull Profund Investor has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Bull Profund go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Bull Profund
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to under-perform the Bull Profund. In addition to that, Nasdaq-100(r) is 2.85 times more volatile than Bull Profund Investor. It trades about -0.12 of its total potential returns per unit of risk. Bull Profund Investor is currently generating about -0.08 per unit of volatility. If you would invest 7,443 in Bull Profund Investor on December 2, 2024 and sell it today you would lose (107.00) from holding Bull Profund Investor or give up 1.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Bull Profund Investor
Performance |
Timeline |
Nasdaq 100 2x |
Bull Profund Investor |
Nasdaq-100(r) and Bull Profund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nasdaq-100(r) and Bull Profund
The main advantage of trading using opposite Nasdaq-100(r) and Bull Profund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Bull Profund 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 Bull Profund will offset losses from the drop in Bull Profund's long position.Nasdaq-100(r) vs. Morningstar Unconstrained Allocation | Nasdaq-100(r) vs. Upright Assets Allocation | Nasdaq-100(r) vs. Touchstone Large Cap | Nasdaq-100(r) vs. Principal Lifetime Hybrid |
Bull Profund vs. Buffalo High Yield | Bull Profund vs. Neuberger Berman Income | Bull Profund vs. Pace High Yield | Bull Profund vs. Prudential High Yield |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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