Correlation Between Usaa Nasdaq and Sp 500
Can any of the company-specific risk be diversified away by investing in both Usaa Nasdaq and Sp 500 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 Sp 500 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 Sp 500 Index, you can compare the effects of market volatilities on Usaa Nasdaq and Sp 500 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 Sp 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usaa Nasdaq and Sp 500.
Diversification Opportunities for Usaa Nasdaq and Sp 500
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Usaa and USSPX is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Usaa Nasdaq 100 and Sp 500 Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp 500 Index 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 Sp 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp 500 Index has no effect on the direction of Usaa Nasdaq i.e., Usaa Nasdaq and Sp 500 go up and down completely randomly.
Pair Corralation between Usaa Nasdaq and Sp 500
Assuming the 90 days horizon Usaa Nasdaq 100 is expected to under-perform the Sp 500. In addition to that, Usaa Nasdaq is 1.35 times more volatile than Sp 500 Index. It trades about -0.07 of its total potential returns per unit of risk. Sp 500 Index is currently generating about -0.05 per unit of volatility. If you would invest 7,339 in Sp 500 Index on December 28, 2024 and sell it today you would lose (256.00) from holding Sp 500 Index or give up 3.49% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Usaa Nasdaq 100 vs. Sp 500 Index
Performance |
Timeline |
Usaa Nasdaq 100 |
Sp 500 Index |
Usaa Nasdaq and Sp 500 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Usaa Nasdaq and Sp 500
The main advantage of trading using opposite Usaa Nasdaq and Sp 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usaa Nasdaq position performs unexpectedly, Sp 500 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 Sp 500 will offset losses from the drop in Sp 500's long position.Usaa Nasdaq vs. Auer Growth Fund | Usaa Nasdaq vs. Vanguard Dividend Growth | Usaa Nasdaq vs. Gamco International Growth | Usaa Nasdaq vs. Ab International Growth |
Sp 500 vs. Nasdaq 100 Index Fund | Sp 500 vs. International Fund International | Sp 500 vs. Science Technology Fund | Sp 500 vs. Aggressive Growth Fund |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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