Correlation Between Electronics Fund and Nasdaq-100(r)

Can any of the company-specific risk be diversified away by investing in both Electronics Fund 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 Electronics Fund 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 Electronics Fund Investor and Nasdaq 100 2x Strategy, you can compare the effects of market volatilities on Electronics Fund 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 Electronics Fund with a short position of Nasdaq-100(r). Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronics Fund and Nasdaq-100(r).

Diversification Opportunities for Electronics Fund and Nasdaq-100(r)

0.96

Correlation Coefficient

Electronics Fund  Nasdaq-100(r)

Almost no diversification

The 3 months correlation between Electronics and Nasdaq-100(r) is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Electronics Fund Investor 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 Electronics Fund 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 Electronics Fund Investor 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 Electronics Fund i.e., Electronics Fund and Nasdaq-100(r) go up and down completely randomly.

Pair Corralation between Electronics Fund and Nasdaq-100(r)

Assuming the 90 days horizon Electronics Fund Investor is expected to generate 0.95 times more return on investment than Nasdaq-100(r). However, Electronics Fund Investor is 1.05 times less risky than Nasdaq-100(r). It trades about 0.23 of its potential returns per unit of risk. Nasdaq 100 2x Strategy is currently generating about 0.19 per unit of risk. If you would invest  46,812  in Electronics Fund Investor on July 8, 2025 and sell it today you would earn a total of  9,401  from holding Electronics Fund Investor or generate 20.08% return on investment over 90 days.

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

Electronics Fund Investor  vs.  Nasdaq 100 2x Strategy

Electronics Fund Investor

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Electronics Fund Investor are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Electronics Fund showed solid returns over the last few months and may actually be approaching a breakup point.

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 essential indicators, Nasdaq-100(r) showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Electronics Fund and Nasdaq-100(r)

The main advantage of trading using opposite Electronics Fund and Nasdaq-100(r) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronics Fund 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 Electronics Fund Investor 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 Global Correlations module to find global opportunities by holding instruments from different markets.