Correlation Between Technology Ultrasector and Short Nasdaq-100
Can any of the company-specific risk be diversified away by investing in both Technology Ultrasector 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 Technology Ultrasector 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 Technology Ultrasector Profund and Short Nasdaq 100 Profund, you can compare the effects of market volatilities on Technology Ultrasector 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 Technology Ultrasector with a short position of Short Nasdaq-100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technology Ultrasector and Short Nasdaq-100.
Diversification Opportunities for Technology Ultrasector and Short Nasdaq-100
-0.99 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Technology and Short is -0.99. Overlapping area represents the amount of risk that can be diversified away by holding Technology Ultrasector Profund 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 Technology Ultrasector 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 Technology Ultrasector Profund 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 Technology Ultrasector i.e., Technology Ultrasector and Short Nasdaq-100 go up and down completely randomly.
Pair Corralation between Technology Ultrasector and Short Nasdaq-100
Assuming the 90 days horizon Technology Ultrasector Profund is expected to generate 1.72 times more return on investment than Short Nasdaq-100. However, Technology Ultrasector is 1.72 times more volatile than Short Nasdaq 100 Profund. It trades about 0.23 of its potential returns per unit of risk. Short Nasdaq 100 Profund is currently generating about -0.18 per unit of risk. If you would invest 2,601 in Technology Ultrasector Profund on May 22, 2025 and sell it today you would earn a total of 531.00 from holding Technology Ultrasector Profund or generate 20.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Technology Ultrasector Profund vs. Short Nasdaq 100 Profund
Performance |
| Timeline |
| Technology Ultrasector |
| Short Nasdaq 100 |
Technology Ultrasector and Short Nasdaq-100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technology Ultrasector and Short Nasdaq-100
The main advantage of trading using opposite Technology Ultrasector and Short Nasdaq-100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technology Ultrasector 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.| Technology Ultrasector vs. Vanguard Health Care | Technology Ultrasector vs. Deutsche Health And | Technology Ultrasector vs. Alger Health Sciences | Technology Ultrasector vs. Tekla Healthcare Investors |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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