Correlation Between Resource America and Nasdaq

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

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

Diversification Opportunities for Resource America and Nasdaq

0.0

Correlation Coefficient

Resource America  Nasdaq

Pay attention - limited upside

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

Pair Corralation between Resource America and Nasdaq

If you would invest  0.00  in Resource America on February 7, 2024 and sell it today you would earn a total of  0.00  from holding Resource America or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Resource America  vs.  Nasdaq Inc

Resource America

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Resource America has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Resource America is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Nasdaq Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Resource America and Nasdaq

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

The idea behind Resource America and Nasdaq Inc 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.