Correlation Between Inverse Nasdaq-100(r) and Nasdaq-100(r)
Can any of the company-specific risk be diversified away by investing in both Inverse Nasdaq-100(r) 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 Inverse Nasdaq-100(r) 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 Inverse Nasdaq 100 2x and Nasdaq 100 2x Strategy, you can compare the effects of market volatilities on Inverse Nasdaq-100(r) 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 Inverse Nasdaq-100(r) with a short position of Nasdaq-100(r). Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse Nasdaq-100(r) and Nasdaq-100(r).
Diversification Opportunities for Inverse Nasdaq-100(r) and Nasdaq-100(r)
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Inverse and Nasdaq-100(r) is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Inverse Nasdaq 100 2x 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 Inverse 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 Inverse Nasdaq 100 2x 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 Inverse Nasdaq-100(r) i.e., Inverse Nasdaq-100(r) and Nasdaq-100(r) go up and down completely randomly.
Pair Corralation between Inverse Nasdaq-100(r) and Nasdaq-100(r)
Assuming the 90 days horizon Inverse Nasdaq 100 2x is expected to under-perform the Nasdaq-100(r). In addition to that, Inverse Nasdaq-100(r) is 1.02 times more volatile than Nasdaq 100 2x Strategy. It trades about -0.1 of its total potential returns per unit of risk. Nasdaq 100 2x Strategy is currently generating about 0.11 per unit of volatility. If you would invest 64,816 in Nasdaq 100 2x Strategy on September 7, 2025 and sell it today you would earn a total of 9,409 from holding Nasdaq 100 2x Strategy or generate 14.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Inverse Nasdaq 100 2x vs. Nasdaq 100 2x Strategy
Performance |
| Timeline |
| Inverse Nasdaq-100(r) |
| Nasdaq 100 2x |
Inverse Nasdaq-100(r) and Nasdaq-100(r) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inverse Nasdaq-100(r) and Nasdaq-100(r)
The main advantage of trading using opposite Inverse Nasdaq-100(r) and Nasdaq-100(r) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse Nasdaq-100(r) 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.| Inverse Nasdaq-100(r) vs. Basic Materials Fund | Inverse Nasdaq-100(r) vs. Basic Materials Fund | Inverse Nasdaq-100(r) vs. Banking Fund Class | Inverse Nasdaq-100(r) vs. Basic Materials Fund |
| Nasdaq-100(r) vs. Glg Intl Small | Nasdaq-100(r) vs. Touchstone Small Cap | Nasdaq-100(r) vs. Nt International Small Mid | Nasdaq-100(r) vs. Aqr Small Cap |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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