Correlation Between Rydex Inverse and Inverse Nasdaq
Can any of the company-specific risk be diversified away by investing in both Rydex Inverse and Inverse Nasdaq 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 Rydex Inverse and Inverse Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rydex Inverse Nasdaq 100 and Inverse Nasdaq 100 Strategy, you can compare the effects of market volatilities on Rydex Inverse and Inverse Nasdaq 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 Rydex Inverse with a short position of Inverse Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rydex Inverse and Inverse Nasdaq.
Diversification Opportunities for Rydex Inverse and Inverse Nasdaq
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rydex and Inverse is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Rydex Inverse Nasdaq 100 and Inverse Nasdaq 100 Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse Nasdaq 100 and Rydex Inverse 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 Rydex Inverse Nasdaq 100 are associated (or correlated) with Inverse Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse Nasdaq 100 has no effect on the direction of Rydex Inverse i.e., Rydex Inverse and Inverse Nasdaq go up and down completely randomly.
Pair Corralation between Rydex Inverse and Inverse Nasdaq
Assuming the 90 days horizon Rydex Inverse Nasdaq 100 is expected to under-perform the Inverse Nasdaq. In addition to that, Rydex Inverse is 1.99 times more volatile than Inverse Nasdaq 100 Strategy. It trades about -0.08 of its total potential returns per unit of risk. Inverse Nasdaq 100 Strategy is currently generating about -0.07 per unit of volatility. If you would invest 12,281 in Inverse Nasdaq 100 Strategy on October 10, 2025 and sell it today you would lose (584.00) from holding Inverse Nasdaq 100 Strategy or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rydex Inverse Nasdaq 100 vs. Inverse Nasdaq 100 Strategy
Performance |
| Timeline |
| Rydex Inverse Nasdaq |
| Inverse Nasdaq 100 |
Rydex Inverse and Inverse Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rydex Inverse and Inverse Nasdaq
The main advantage of trading using opposite Rydex Inverse and Inverse Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rydex Inverse position performs unexpectedly, Inverse Nasdaq 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 Inverse Nasdaq will offset losses from the drop in Inverse Nasdaq's long position.| Rydex Inverse vs. Fabwx | Rydex Inverse vs. Balanced Fund Retail | Rydex Inverse vs. Ab Value Fund | Rydex Inverse vs. Fa 529 Aggressive |
| Inverse Nasdaq vs. Ab Government Exchange | Inverse Nasdaq vs. Aig Government Money | Inverse Nasdaq vs. Cref Money Market | Inverse Nasdaq vs. Voya Government Money |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |