Correlation Between Nasdaq 100 and Dimensional 2035
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Dimensional 2035 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 and Dimensional 2035 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 Dimensional 2035 Target, you can compare the effects of market volatilities on Nasdaq 100 and Dimensional 2035 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 with a short position of Dimensional 2035. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Dimensional 2035.
Diversification Opportunities for Nasdaq 100 and Dimensional 2035
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nasdaq and Dimensional is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Dimensional 2035 Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional 2035 Target and Nasdaq 100 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 Dimensional 2035. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional 2035 Target has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Dimensional 2035 go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Dimensional 2035
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to generate 1.75 times more return on investment than Dimensional 2035. However, Nasdaq 100 is 1.75 times more volatile than Dimensional 2035 Target. It trades about 0.2 of its potential returns per unit of risk. Dimensional 2035 Target is currently generating about 0.21 per unit of risk. If you would invest 5,274 in Nasdaq 100 Index Fund on May 26, 2025 and sell it today you would earn a total of 519.00 from holding Nasdaq 100 Index Fund or generate 9.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Dimensional 2035 Target
Performance |
| Timeline |
| Nasdaq 100 Index |
| Dimensional 2035 Target |
Nasdaq 100 and Dimensional 2035 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Dimensional 2035
The main advantage of trading using opposite Nasdaq 100 and Dimensional 2035 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Dimensional 2035 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 Dimensional 2035 will offset losses from the drop in Dimensional 2035's long position.| Nasdaq 100 vs. Sp 500 Index | Nasdaq 100 vs. Science Technology Fund | Nasdaq 100 vs. Extended Market Index | Nasdaq 100 vs. World Growth Fund |
| Dimensional 2035 vs. Six Circles Credit | Dimensional 2035 vs. Multi Manager High Yield | Dimensional 2035 vs. Prudential High Yield | Dimensional 2035 vs. Neuberger Berman Income |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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