Correlation Between Nasdaq-100(r) and Stringer Growth

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

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

Diversification Opportunities for Nasdaq-100(r) and Stringer Growth

0.98

Correlation Coefficient

Nasdaq-100(r)  Stringer Growth

Almost no diversification

The 3 months correlation between Nasdaq-100(r) and Stringer is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Stringer Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stringer Growth and Nasdaq-100(r) 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 100 2x Strategy are associated (or correlated) with Stringer Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stringer Growth has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Stringer Growth go up and down completely randomly.

Pair Corralation between Nasdaq-100(r) and Stringer Growth

Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 3.32 times more return on investment than Stringer Growth. However, Nasdaq-100(r) is 3.32 times more volatile than Stringer Growth Fund. It trades about 0.2 of its potential returns per unit of risk. Stringer Growth Fund is currently generating about 0.15 per unit of risk. If you would invest  37,560  in Nasdaq 100 2x Strategy on May 20, 2025 and sell it today you would earn a total of  7,787  from holding Nasdaq 100 2x Strategy or generate 20.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Nasdaq 100 2x Strategy  vs.  Stringer Growth Fund

Nasdaq 100 2x

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq 100 2x Strategy are ranked lower than 15 (%) 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.

Stringer Growth

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Stringer Growth Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Stringer Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nasdaq-100(r) and Stringer Growth

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

The idea behind Nasdaq 100 2x Strategy and Stringer Growth Fund 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.