Correlation Analysis Between NASDAQ UK and Russell 2000

This module allows you to analyze existing cross correlation between NASDAQ UK and Russell 2000 . You can compare the effects of market volatilities on NASDAQ UK and Russell 2000 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 UK with a short position of Russell 2000. See also your portfolio center. Please also check ongoing floating volatility patterns of NASDAQ UK and Russell 2000.
Horizon     30 Days    Login   to change
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Comparative Performance

 Predicted Return Density 

NASDAQ UK  vs.  Russell 2000

 Performance (%) 

Pair Volatility

Assuming 30 trading days horizon, NASDAQ UK is expected to under-perform the Russell 2000. But the index apears to be less risky and, when comparing its historical volatility, NASDAQ UK is 1.64 times less risky than Russell 2000. The index trades about -0.19 of its potential returns per unit of risk. The Russell 2000 is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  156,760  in Russell 2000 on May 17, 2019 and sell it today you would lose (4,510)  from holding Russell 2000 or give up 2.88% of portfolio value over 30 days.

Pair Corralation between NASDAQ UK and Russell 2000

Time Period2 Months [change]
ValuesDaily Returns

Diversification Opportunities for NASDAQ UK and Russell 2000

NASDAQ UK diversification synergy

Very poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding NASDAQ UK and Russell 2000 in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Russell 2000 and NASDAQ UK 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 UK are associated (or correlated) with Russell 2000. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Russell 2000 has no effect on the direction of NASDAQ UK i.e. NASDAQ UK and Russell 2000 go up and down completely randomly.
See also your portfolio center. Please also try Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.