Correlation Between Nasdaq-100 Index and Pace International
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100 Index and Pace International 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 Index and Pace International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Index Fund and Pace International Emerging, you can compare the effects of market volatilities on Nasdaq-100 Index and Pace International 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 Index with a short position of Pace International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100 Index and Pace International.
Diversification Opportunities for Nasdaq-100 Index and Pace International
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nasdaq-100 and Pace is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Pace International Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace International and Nasdaq-100 Index 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 Index Fund are associated (or correlated) with Pace International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace International has no effect on the direction of Nasdaq-100 Index i.e., Nasdaq-100 Index and Pace International go up and down completely randomly.
Pair Corralation between Nasdaq-100 Index and Pace International
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to generate 1.44 times more return on investment than Pace International. However, Nasdaq-100 Index is 1.44 times more volatile than Pace International Emerging. It trades about 0.08 of its potential returns per unit of risk. Pace International Emerging is currently generating about 0.07 per unit of risk. If you would invest 3,719 in Nasdaq 100 Index Fund on June 8, 2025 and sell it today you would earn a total of 2,122 from holding Nasdaq 100 Index Fund or generate 57.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Pace International Emerging
Performance |
| Timeline |
| Nasdaq 100 Index |
| Pace International |
Nasdaq-100 Index and Pace International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100 Index and Pace International
The main advantage of trading using opposite Nasdaq-100 Index and Pace International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100 Index position performs unexpectedly, Pace International 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 Pace International will offset losses from the drop in Pace International's long position.| Nasdaq-100 Index vs. Rbc Bluebay Global | Nasdaq-100 Index vs. Ab High Income | Nasdaq-100 Index vs. Metropolitan West High | Nasdaq-100 Index vs. Transamerica High Yield |
| Pace International vs. Pace Smallmedium Value | Pace International vs. Pace International Equity | Pace International vs. Ubs Allocation Fund | Pace International vs. Ubs Allocation Fund |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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