Correlation Between Nasdaq-100 Index and Saat Moderate

Can any of the company-specific risk be diversified away by investing in both Nasdaq-100 Index and Saat Moderate 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 Saat Moderate 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 Saat Moderate Strategy, you can compare the effects of market volatilities on Nasdaq-100 Index and Saat Moderate 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 Saat Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100 Index and Saat Moderate.

Diversification Opportunities for Nasdaq-100 Index and Saat Moderate

0.32

Correlation Coefficient

Nasdaq-100 Index  Saat Moderate

Weak diversification

The 3 months correlation between Nasdaq-100 and Saat is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Saat Moderate Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Moderate Strategy 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 Saat Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Moderate Strategy has no effect on the direction of Nasdaq-100 Index i.e., Nasdaq-100 Index and Saat Moderate go up and down completely randomly.

Pair Corralation between Nasdaq-100 Index and Saat Moderate

Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to under-perform the Saat Moderate. In addition to that, Nasdaq-100 Index is 4.42 times more volatile than Saat Moderate Strategy. It trades about -0.08 of its total potential returns per unit of risk. Saat Moderate Strategy is currently generating about 0.07 per unit of volatility. If you would invest  1,168  in Saat Moderate Strategy on December 4, 2024 and sell it today you would earn a total of  13.00  from holding Saat Moderate Strategy or generate 1.11% return on investment over 90 days.

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

Nasdaq 100 Index Fund  vs.  Saat Moderate Strategy

Nasdaq 100 Index

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nasdaq 100 Index Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Saat Moderate Strategy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Saat Moderate Strategy are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Saat Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nasdaq-100 Index and Saat Moderate

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

The idea behind Nasdaq 100 Index Fund and Saat Moderate Strategy 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.