Correlation Between Stocksplus and Short Nasdaq-100
Can any of the company-specific risk be diversified away by investing in both Stocksplus and Short Nasdaq-100 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 Stocksplus and Short Nasdaq-100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stocksplus Tr Short and Short Nasdaq 100 Profund, you can compare the effects of market volatilities on Stocksplus and Short Nasdaq-100 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 Stocksplus with a short position of Short Nasdaq-100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stocksplus and Short Nasdaq-100.
Diversification Opportunities for Stocksplus and Short Nasdaq-100
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Stocksplus and Short is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Stocksplus Tr Short and Short Nasdaq 100 Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Nasdaq 100 and Stocksplus 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 Stocksplus Tr Short are associated (or correlated) with Short Nasdaq-100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Nasdaq 100 has no effect on the direction of Stocksplus i.e., Stocksplus and Short Nasdaq-100 go up and down completely randomly.
Pair Corralation between Stocksplus and Short Nasdaq-100
Assuming the 90 days horizon Stocksplus Tr Short is expected to under-perform the Short Nasdaq-100. But the mutual fund apears to be less risky and, when comparing its historical volatility, Stocksplus Tr Short is 1.64 times less risky than Short Nasdaq-100. The mutual fund trades about -0.21 of its potential returns per unit of risk. The Short Nasdaq 100 Profund is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 4,231 in Short Nasdaq 100 Profund on April 14, 2025 and sell it today you would lose (437.00) from holding Short Nasdaq 100 Profund or give up 10.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stocksplus Tr Short vs. Short Nasdaq 100 Profund
Performance |
| Timeline |
| Stocksplus Tr Short |
| Short Nasdaq 100 |
Stocksplus and Short Nasdaq-100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stocksplus and Short Nasdaq-100
The main advantage of trading using opposite Stocksplus and Short Nasdaq-100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stocksplus position performs unexpectedly, Short Nasdaq-100 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 Short Nasdaq-100 will offset losses from the drop in Short Nasdaq-100's long position.| Stocksplus vs. Rbc Global Equity | Stocksplus vs. Qs Global Equity | Stocksplus vs. Artisan Global Opportunities | Stocksplus vs. Ab Global Risk |
| Short Nasdaq-100 vs. Short Real Estate | Short Nasdaq-100 vs. Short Real Estate | Short Nasdaq-100 vs. Ultrashort Mid Cap Profund | Short Nasdaq-100 vs. Technology Ultrasector Profund |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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