Correlation Between Nasdaq-100(r) and Lyrical Us
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Lyrical Us 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 Lyrical Us 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 Lyrical Value Equity, you can compare the effects of market volatilities on Nasdaq-100(r) and Lyrical Us 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 Lyrical Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Lyrical Us.
Diversification Opportunities for Nasdaq-100(r) and Lyrical Us
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nasdaq-100(r) and Lyrical is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Lyrical Value Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyrical Value Equity 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 Lyrical Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyrical Value Equity has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Lyrical Us go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Lyrical Us
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 1.78 times more return on investment than Lyrical Us. However, Nasdaq-100(r) is 1.78 times more volatile than Lyrical Value Equity. It trades about 0.16 of its potential returns per unit of risk. Lyrical Value Equity is currently generating about 0.11 per unit of risk. If you would invest 55,824 in Nasdaq 100 2x Strategy on June 11, 2025 and sell it today you would earn a total of 8,422 from holding Nasdaq 100 2x Strategy or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Lyrical Value Equity
Performance |
| Timeline |
| Nasdaq 100 2x |
| Lyrical Value Equity |
Nasdaq-100(r) and Lyrical Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Lyrical Us
The main advantage of trading using opposite Nasdaq-100(r) and Lyrical Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Lyrical Us 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 Lyrical Us will offset losses from the drop in Lyrical Us' 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 |
| Lyrical Us vs. Federated Government Income | Lyrical Us vs. Us Government Securities | Lyrical Us vs. Vanguard Short Term Government | Lyrical Us vs. Wells Fargo Government |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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