Correlation Between Profunds Ultrashort and Macquarie Global

Can any of the company-specific risk be diversified away by investing in both Profunds Ultrashort and Macquarie Global 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 Profunds Ultrashort and Macquarie Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Profunds Ultrashort and Macquarie Global

0.78

Correlation Coefficient

Profunds Ultrashort  Macquarie Global

Poor diversification

The 3 months correlation between Profunds and Macquarie is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Profunds Ultrashort Nasdaq 100 and Macquarie Global Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Global Inf and Profunds Ultrashort 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 Profunds Ultrashort Nasdaq 100 are associated (or correlated) with Macquarie Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Global Inf has no effect on the direction of Profunds Ultrashort i.e., Profunds Ultrashort and Macquarie Global go up and down completely randomly.

Pair Corralation between Profunds Ultrashort and Macquarie Global

If you would invest  2.10  in Macquarie Global Infrastructure on October 5, 2024 and sell it today you would earn a total of  0.00  from holding Macquarie Global Infrastructure or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.64%
Values	Daily Returns

Profunds Ultrashort Nasdaq 100  vs.  Macquarie Global Infrastructur

Profunds Ultrashort

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Profunds Ultrashort Nasdaq 100 has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Macquarie Global Inf

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Macquarie Global Infrastructure has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable technical and fundamental indicators, Macquarie Global is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Profunds Ultrashort and Macquarie Global

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

The idea behind Profunds Ultrashort Nasdaq 100 and Macquarie Global Infrastructure 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.