Correlation Between Lsv Value and Nasdaq-100(r)
Can any of the company-specific risk be diversified away by investing in both Lsv Value and Nasdaq-100(r) 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 Lsv Value and Nasdaq-100(r) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lsv Value Equity and Nasdaq 100 2x Strategy, you can compare the effects of market volatilities on Lsv Value and Nasdaq-100(r) 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 Lsv Value with a short position of Nasdaq-100(r). Check out your portfolio center. Please also check ongoing floating volatility patterns of Lsv Value and Nasdaq-100(r).
Diversification Opportunities for Lsv Value and Nasdaq-100(r)
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lsv and Nasdaq-100(r) is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lsv Value Equity and Nasdaq 100 2x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 2x and Lsv Value 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 Lsv Value Equity are associated (or correlated) with Nasdaq-100(r). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 2x has no effect on the direction of Lsv Value i.e., Lsv Value and Nasdaq-100(r) go up and down completely randomly.
Pair Corralation between Lsv Value and Nasdaq-100(r)
Assuming the 90 days horizon Lsv Value is expected to generate 3.85 times less return on investment than Nasdaq-100(r). But when comparing it to its historical volatility, Lsv Value Equity is 2.75 times less risky than Nasdaq-100(r). It trades about 0.06 of its potential returns per unit of risk. Nasdaq 100 2x Strategy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 43,166 in Nasdaq 100 2x Strategy on August 21, 2025 and sell it today you would earn a total of 4,200 from holding Nasdaq 100 2x Strategy or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lsv Value Equity vs. Nasdaq 100 2x Strategy
Performance |
| Timeline |
| Lsv Value Equity |
| Nasdaq 100 2x |
Lsv Value and Nasdaq-100(r) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lsv Value and Nasdaq-100(r)
The main advantage of trading using opposite Lsv Value and Nasdaq-100(r) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lsv Value position performs unexpectedly, Nasdaq-100(r) 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 Nasdaq-100(r) will offset losses from the drop in Nasdaq-100(r)'s long position.| Lsv Value vs. Spectrum International Fund | Lsv Value vs. T Rowe Price | Lsv Value vs. Virtus Dividend Interest | Lsv Value vs. Goldman Sachs Equity |
| Nasdaq-100(r) vs. Lsv Value Equity | Nasdaq-100(r) vs. Principal Lifetime 2055 | Nasdaq-100(r) vs. Columbia Thermostat Fund | Nasdaq-100(r) vs. Spectrum International 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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