Correlation Between Nasdaq-100(r) and Vy(r) T

Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Vy(r) T 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 Vy(r) T 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 Vy T Rowe, you can compare the effects of market volatilities on Nasdaq-100(r) and Vy(r) T 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 Vy(r) T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Vy(r) T.

Diversification Opportunities for Nasdaq-100(r) and Vy(r) T

0.72

Correlation Coefficient

Nasdaq-100(r)  Vy(r) T

Poor diversification

The 3 months correlation between Nasdaq-100(r) and VY(R) is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Vy T Rowe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy T Rowe 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 Vy(r) T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy T Rowe has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Vy(r) T go up and down completely randomly.

Pair Corralation between Nasdaq-100(r) and Vy(r) T

Assuming the 90 days horizon Nasdaq-100(r) is expected to generate 4.67 times less return on investment than Vy(r) T. In addition to that, Nasdaq-100(r) is 2.27 times more volatile than Vy T Rowe. It trades about 0.02 of its total potential returns per unit of risk. Vy T Rowe is currently generating about 0.23 per unit of volatility. If you would invest  883.00  in Vy T Rowe on October 26, 2024 and sell it today you would earn a total of  38.00  from holding Vy T Rowe or generate 4.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Nasdaq 100 2x Strategy  vs.  Vy T Rowe

Nasdaq 100 2x

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq 100 2x Strategy are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Nasdaq-100(r) may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Vy T Rowe

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vy T Rowe are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vy(r) T may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Nasdaq-100(r) and Vy(r) T

The main advantage of trading using opposite Nasdaq-100(r) and Vy(r) T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Vy(r) T 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 Vy(r) T will offset losses from the drop in Vy(r) T's long position.

The idea behind Nasdaq 100 2x Strategy and Vy T Rowe 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.