Correlation Between Nasdaq-100 Index and Deutsche European
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100 Index and Deutsche European 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 Index and Deutsche European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Index Fund and Deutsche European Equity, you can compare the effects of market volatilities on Nasdaq-100 Index and Deutsche European 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 Index with a short position of Deutsche European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100 Index and Deutsche European.
Diversification Opportunities for Nasdaq-100 Index and Deutsche European
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nasdaq-100 and Deutsche is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Deutsche European Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche European Equity and Nasdaq-100 Index 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 Index Fund are associated (or correlated) with Deutsche European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche European Equity has no effect on the direction of Nasdaq-100 Index i.e., Nasdaq-100 Index and Deutsche European go up and down completely randomly.
Pair Corralation between Nasdaq-100 Index and Deutsche European
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to under-perform the Deutsche European. In addition to that, Nasdaq-100 Index is 1.63 times more volatile than Deutsche European Equity. It trades about 0.0 of its total potential returns per unit of risk. Deutsche European Equity is currently generating about 0.22 per unit of volatility. If you would invest 1,241 in Deutsche European Equity on December 3, 2024 and sell it today you would earn a total of 83.00 from holding Deutsche European Equity or generate 6.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nasdaq 100 Index Fund vs. Deutsche European Equity
Performance |
Timeline |
Nasdaq 100 Index |
Deutsche European Equity |
Nasdaq-100 Index and Deutsche European Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nasdaq-100 Index and Deutsche European
The main advantage of trading using opposite Nasdaq-100 Index and Deutsche European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100 Index position performs unexpectedly, Deutsche European 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 Deutsche European will offset losses from the drop in Deutsche European's long position.Nasdaq-100 Index vs. Principal Lifetime Hybrid | Nasdaq-100 Index vs. Knights Of Umbus | Nasdaq-100 Index vs. Touchstone Large Cap | Nasdaq-100 Index vs. The Hartford Servative |
Deutsche European vs. Angel Oak Multi Strategy | Deutsche European vs. Transamerica Emerging Markets | Deutsche European vs. Eagle Mlp Strategy | Deutsche European vs. Siit Emerging Markets |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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