Correlation Between Ultra Nasdaq-100 and Hawaiian Tax-free

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

By analyzing existing cross correlation between Ultra Nasdaq 100 Profunds and Hawaiian Tax Free Trust, you can compare the effects of market volatilities on Ultra Nasdaq-100 and Hawaiian Tax-free 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 Ultra Nasdaq-100 with a short position of Hawaiian Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Nasdaq-100 and Hawaiian Tax-free.

Diversification Opportunities for Ultra Nasdaq-100 and Hawaiian Tax-free

0.0

Correlation Coefficient

Ultra Nasdaq-100  Hawaiian Tax-free

Pay attention - limited upside

The 3 months correlation between Ultra and Hawaiian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Nasdaq 100 Profunds and Hawaiian Tax Free Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Tax Free and Ultra 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 Ultra Nasdaq 100 Profunds are associated (or correlated) with Hawaiian Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Tax Free has no effect on the direction of Ultra Nasdaq-100 i.e., Ultra Nasdaq-100 and Hawaiian Tax-free go up and down completely randomly.

Pair Corralation between Ultra Nasdaq-100 and Hawaiian Tax-free

Assuming the 90 days horizon Ultra Nasdaq 100 Profunds is expected to under-perform the Hawaiian Tax-free. In addition to that, Ultra Nasdaq-100 is 13.9 times more volatile than Hawaiian Tax Free Trust. It trades about -0.02 of its total potential returns per unit of risk. Hawaiian Tax Free Trust is currently generating about -0.03 per unit of volatility. If you would invest  1,061  in Hawaiian Tax Free Trust on December 2, 2024 and sell it today you would lose (3.00) from holding Hawaiian Tax Free Trust or give up 0.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ultra Nasdaq 100 Profunds  vs.  Hawaiian Tax Free Trust

Ultra Nasdaq 100

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ultra Nasdaq 100 Profunds has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Ultra Nasdaq-100 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hawaiian Tax Free

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Ultra Nasdaq-100 and Hawaiian Tax-free

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

The idea behind Ultra Nasdaq 100 Profunds and Hawaiian Tax Free Trust 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.