Correlation Between Nasdaq-100(r) and Ab Select
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Ab Select 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(r) and Ab Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Ab Select Longshort, you can compare the effects of market volatilities on Nasdaq-100(r) and Ab Select 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(r) with a short position of Ab Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Ab Select.
Diversification Opportunities for Nasdaq-100(r) and Ab Select
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nasdaq-100(r) and ASCLX is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Ab Select Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Select Longshort and Nasdaq-100(r) 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 2x Strategy are associated (or correlated) with Ab Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Select Longshort has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Ab Select go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Ab Select
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 4.66 times more return on investment than Ab Select. However, Nasdaq-100(r) is 4.66 times more volatile than Ab Select Longshort. It trades about 0.15 of its potential returns per unit of risk. Ab Select Longshort is currently generating about 0.24 per unit of risk. If you would invest 54,872 in Nasdaq 100 2x Strategy on June 3, 2025 and sell it today you would earn a total of 8,155 from holding Nasdaq 100 2x Strategy or generate 14.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Ab Select Longshort
Performance |
| Timeline |
| Nasdaq 100 2x |
| Ab Select Longshort |
Nasdaq-100(r) and Ab Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Ab Select
The main advantage of trading using opposite Nasdaq-100(r) and Ab Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Ab Select 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 Ab Select will offset losses from the drop in Ab Select's long position.| Nasdaq-100(r) vs. Nasdaq 100 2x Strategy | Nasdaq-100(r) vs. Direxion Monthly Nasdaq 100 | Nasdaq-100(r) vs. Ultranasdaq 100 Profund Ultranasdaq 100 | Nasdaq-100(r) vs. Nasdaq 100 2x Strategy |
| Ab Select vs. Neuberger Berman Long | Ab Select vs. Pimco Rae Worldwide | Ab Select vs. Pimco Rae Worldwide | Ab Select vs. Ab Select Longshort |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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