Correlation Between Wcm Focused and Nasdaq-100(r)
Can any of the company-specific risk be diversified away by investing in both Wcm Focused 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 Wcm Focused 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 Wcm Focused Emerging and Nasdaq 100 2x Strategy, you can compare the effects of market volatilities on Wcm Focused 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 Wcm Focused with a short position of Nasdaq-100(r). Check out your portfolio center. Please also check ongoing floating volatility patterns of Wcm Focused and Nasdaq-100(r).
Diversification Opportunities for Wcm Focused and Nasdaq-100(r)
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wcm and Nasdaq-100(r) is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Wcm Focused Emerging 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 Wcm Focused 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 Wcm Focused Emerging 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 Wcm Focused i.e., Wcm Focused and Nasdaq-100(r) go up and down completely randomly.
Pair Corralation between Wcm Focused and Nasdaq-100(r)
Assuming the 90 days horizon Wcm Focused is expected to generate 1.5 times less return on investment than Nasdaq-100(r). But when comparing it to its historical volatility, Wcm Focused Emerging is 1.79 times less risky than Nasdaq-100(r). It trades about 0.2 of its potential returns per unit of risk. Nasdaq 100 2x Strategy is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 39,307 in Nasdaq 100 2x Strategy on June 12, 2025 and sell it today you would earn a total of 6,334 from holding Nasdaq 100 2x Strategy or generate 16.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wcm Focused Emerging vs. Nasdaq 100 2x Strategy
Performance |
| Timeline |
| Wcm Focused Emerging |
| Nasdaq 100 2x |
Wcm Focused and Nasdaq-100(r) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wcm Focused and Nasdaq-100(r)
The main advantage of trading using opposite Wcm Focused and Nasdaq-100(r) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wcm Focused 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.| Wcm Focused vs. Wcm Focused International | Wcm Focused vs. Artisan Developing World | Wcm Focused vs. International Advantage Portfolio | Wcm Focused vs. Causeway Emerging Markets |
| Nasdaq-100(r) vs. Financials Ultrasector Profund | Nasdaq-100(r) vs. Financial Industries Fund | Nasdaq-100(r) vs. Blackrock Financial Institutions | Nasdaq-100(r) vs. Gabelli Global Financial |
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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