Correlation Between Nasdaq and USA Performance

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

By analyzing existing cross correlation between Nasdaq Inc and USA Performance Products, you can compare the effects of market volatilities on Nasdaq and USA Performance 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 with a short position of USA Performance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and USA Performance.

Diversification Opportunities for Nasdaq and USA Performance

0.0

Correlation Coefficient

Nasdaq  USA Performance

Pay attention - limited upside

The 3 months correlation between Nasdaq and USA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and USA Performance Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USA Performance Products and Nasdaq 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 Inc are associated (or correlated) with USA Performance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USA Performance Products has no effect on the direction of Nasdaq i.e., Nasdaq and USA Performance go up and down completely randomly.

Pair Corralation between Nasdaq and USA Performance

If you would invest  7,379  in Nasdaq Inc on September 23, 2024 and sell it today you would earn a total of  391.00  from holding Nasdaq Inc or generate 5.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nasdaq Inc  vs.  USA Performance Products

Nasdaq Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

USA Performance Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days USA Performance Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, USA Performance is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Nasdaq and USA Performance

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

The idea behind Nasdaq Inc and USA Performance Products 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.