Correlation Between Nasdaq and Leaf Mobile

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

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

Diversification Opportunities for Nasdaq and Leaf Mobile

-0.91

Correlation Coefficient

Nasdaq  Leaf Mobile

Pay attention - limited upside

The 3 months correlation between Nasdaq and Leaf is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Leaf Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leaf Mobile 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 Leaf Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leaf Mobile has no effect on the direction of Nasdaq i.e., Nasdaq and Leaf Mobile go up and down completely randomly.

Pair Corralation between Nasdaq and Leaf Mobile

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.23 times more return on investment than Leaf Mobile. However, Nasdaq Inc is 4.41 times less risky than Leaf Mobile. It trades about -0.19 of its potential returns per unit of risk. Leaf Mobile is currently generating about -0.06 per unit of risk. If you would invest  8,064  in Nasdaq Inc on September 22, 2024 and sell it today you would lose (326.00) from holding Nasdaq Inc or give up 4.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Nasdaq Inc  vs.  Leaf Mobile

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.

Leaf Mobile

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Leaf Mobile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Nasdaq and Leaf Mobile

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

The idea behind Nasdaq Inc and Leaf Mobile 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.