Correlation Between Usaa Nasdaq and Precious Metals

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

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

Diversification Opportunities for Usaa Nasdaq and Precious Metals

-0.43

Correlation Coefficient

Usaa Nasdaq  Precious Metals

Very good diversification

The 3 months correlation between Usaa and Precious is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Usaa Nasdaq 100 and Precious Metals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals And and Usaa 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 Usaa Nasdaq 100 are associated (or correlated) with Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals And has no effect on the direction of Usaa Nasdaq i.e., Usaa Nasdaq and Precious Metals go up and down completely randomly.

Pair Corralation between Usaa Nasdaq and Precious Metals

Assuming the 90 days horizon Usaa Nasdaq 100 is expected to generate 0.67 times more return on investment than Precious Metals. However, Usaa Nasdaq 100 is 1.5 times less risky than Precious Metals. It trades about 0.11 of its potential returns per unit of risk. Precious Metals And is currently generating about 0.02 per unit of risk. If you would invest  2,956  in Usaa Nasdaq 100 on October 11, 2024 and sell it today you would earn a total of  2,261  from holding Usaa Nasdaq 100 or generate 76.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Usaa Nasdaq 100  vs.  Precious Metals And

Usaa Nasdaq 100

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Usaa Nasdaq 100 are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Usaa Nasdaq is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Precious Metals And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Precious Metals And has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Usaa Nasdaq and Precious Metals

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

The idea behind Usaa Nasdaq 100 and Precious Metals And 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.