Correlation Between Ultra Nasdaq-100 and Falling Us

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Ultra Nasdaq-100 and Falling Us 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 Falling Us 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 Falling Dollar Profund, you can compare the effects of market volatilities on Ultra Nasdaq-100 and Falling Us 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 Falling Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Nasdaq-100 and Falling Us.

Diversification Opportunities for Ultra Nasdaq-100 and Falling Us

-0.75
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Ultra and Falling is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Nasdaq 100 Profunds and Falling Dollar Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falling Dollar Profund 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 Falling Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falling Dollar Profund has no effect on the direction of Ultra Nasdaq-100 i.e., Ultra Nasdaq-100 and Falling Us go up and down completely randomly.

Pair Corralation between Ultra Nasdaq-100 and Falling Us

Assuming the 90 days horizon Ultra Nasdaq 100 Profunds is expected to generate 5.49 times more return on investment than Falling Us. However, Ultra Nasdaq-100 is 5.49 times more volatile than Falling Dollar Profund. It trades about 0.08 of its potential returns per unit of risk. Falling Dollar Profund is currently generating about -0.15 per unit of risk. If you would invest  10,249  in Ultra Nasdaq 100 Profunds on August 30, 2024 and sell it today you would earn a total of  1,014  from holding Ultra Nasdaq 100 Profunds or generate 9.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Ultra Nasdaq 100 Profunds  vs.  Falling Dollar Profund

 Performance 
       Timeline  
Ultra Nasdaq 100 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Ultra Nasdaq 100 Profunds are ranked lower than 6 (%) 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 December 2024.
Falling Dollar Profund 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Falling Dollar Profund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Falling Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ultra Nasdaq-100 and Falling Us Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ultra Nasdaq-100 and Falling Us

The main advantage of trading using opposite Ultra Nasdaq-100 and Falling Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Nasdaq-100 position performs unexpectedly, Falling Us 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 Falling Us will offset losses from the drop in Falling Us' long position.
The idea behind Ultra Nasdaq 100 Profunds and Falling Dollar Profund 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.
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

Other Complementary Tools

Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance