Correlation Between Ultra Nasdaq-100 and Monthly Rebalance

Can any of the company-specific risk be diversified away by investing in both Ultra Nasdaq-100 and Monthly Rebalance 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 Ultra Nasdaq-100 and Monthly Rebalance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ultra Nasdaq 100 Profunds and Monthly Rebalance Nasdaq 100, you can compare the effects of market volatilities on Ultra Nasdaq-100 and Monthly Rebalance 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 Ultra Nasdaq-100 with a short position of Monthly Rebalance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Nasdaq-100 and Monthly Rebalance.

Diversification Opportunities for Ultra Nasdaq-100 and Monthly Rebalance

1.0

Correlation Coefficient

Ultra Nasdaq-100  Monthly Rebalance

No risk reduction

The 3 months correlation between Ultra and Monthly is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Nasdaq 100 Profunds and Monthly Rebalance Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monthly Rebalance and Ultra 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 Ultra Nasdaq 100 Profunds are associated (or correlated) with Monthly Rebalance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monthly Rebalance has no effect on the direction of Ultra Nasdaq-100 i.e., Ultra Nasdaq-100 and Monthly Rebalance go up and down completely randomly.

Pair Corralation between Ultra Nasdaq-100 and Monthly Rebalance

Assuming the 90 days horizon Ultra Nasdaq 100 Profunds is expected to generate 0.97 times more return on investment than Monthly Rebalance. However, Ultra Nasdaq 100 Profunds is 1.03 times less risky than Monthly Rebalance. It trades about 0.1 of its potential returns per unit of risk. Monthly Rebalance Nasdaq 100 is currently generating about 0.1 per unit of risk. If you would invest  9,133  in Ultra Nasdaq 100 Profunds on March 14, 2024 and sell it today you would earn a total of  1,040  from holding Ultra Nasdaq 100 Profunds or generate 11.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Ultra Nasdaq 100 Profunds  vs.  Monthly Rebalance Nasdaq 100

Ultra Nasdaq 100

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ultra Nasdaq 100 Profunds are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Ultra Nasdaq-100 may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Monthly Rebalance

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Monthly Rebalance Nasdaq 100 are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Monthly Rebalance may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Ultra Nasdaq-100 and Monthly Rebalance

The main advantage of trading using opposite Ultra Nasdaq-100 and Monthly Rebalance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Nasdaq-100 position performs unexpectedly, Monthly Rebalance 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 Monthly Rebalance will offset losses from the drop in Monthly Rebalance's long position.

The idea behind Ultra Nasdaq 100 Profunds and Monthly Rebalance Nasdaq 100 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.