Correlation Between Pioneer Money and Nasdaq-100(r)

Can any of the company-specific risk be diversified away by investing in both Pioneer Money and Nasdaq-100(r) 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 Pioneer Money and Nasdaq-100(r) into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pioneer Money Market and Nasdaq 100 2x Strategy, you can compare the effects of market volatilities on Pioneer Money and Nasdaq-100(r) 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 Pioneer Money with a short position of Nasdaq-100(r). Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer Money and Nasdaq-100(r).

Diversification Opportunities for Pioneer Money and Nasdaq-100(r)

0.31

Correlation Coefficient

Pioneer Money  Nasdaq-100(r)

Weak diversification

The 3 months correlation between Pioneer and Nasdaq-100(r) is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Money Market and Nasdaq 100 2x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 2x and Pioneer Money 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 Pioneer Money Market are associated (or correlated) with Nasdaq-100(r). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 2x has no effect on the direction of Pioneer Money i.e., Pioneer Money and Nasdaq-100(r) go up and down completely randomly.

Pair Corralation between Pioneer Money and Nasdaq-100(r)

Assuming the 90 days horizon Pioneer Money Market is expected to generate 8.45 times more return on investment than Nasdaq-100(r). However, Pioneer Money is 8.45 times more volatile than Nasdaq 100 2x Strategy. It trades about 0.04 of its potential returns per unit of risk. Nasdaq 100 2x Strategy is currently generating about 0.09 per unit of risk. If you would invest  278.00  in Pioneer Money Market on August 15, 2024 and sell it today you would lose (178.00) from holding Pioneer Money Market or give up 64.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.6%
Values	Daily Returns

Pioneer Money Market  vs.  Nasdaq 100 2x Strategy

Pioneer Money Market

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Money Market are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pioneer Money is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nasdaq 100 2x

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq 100 2x Strategy are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Nasdaq-100(r) showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pioneer Money and Nasdaq-100(r)

The main advantage of trading using opposite Pioneer Money and Nasdaq-100(r) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneer Money position performs unexpectedly, Nasdaq-100(r) 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-100(r) will offset losses from the drop in Nasdaq-100(r)'s long position.

The idea behind Pioneer Money Market and Nasdaq 100 2x Strategy 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.