Correlation Between NASDAQ TEST and New Perspective

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

By analyzing existing cross correlation between NASDAQ TEST STOCK and New Perspective Fund, you can compare the effects of market volatilities on NASDAQ TEST and New Perspective 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 TEST with a short position of New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of NASDAQ TEST and New Perspective.

Diversification Opportunities for NASDAQ TEST and New Perspective

-0.03

Correlation Coefficient

NASDAQ TEST  New Perspective

Good diversification

The 3 months correlation between NASDAQ and New is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding NASDAQ TEST STOCK and New Perspective Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective and NASDAQ TEST 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 TEST STOCK are associated (or correlated) with New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of NASDAQ TEST i.e., NASDAQ TEST and New Perspective go up and down completely randomly.

Pair Corralation between NASDAQ TEST and New Perspective

Assuming the 90 days horizon NASDAQ TEST is expected to generate 1.56 times less return on investment than New Perspective. In addition to that, NASDAQ TEST is 16.63 times more volatile than New Perspective Fund. It trades about 0.01 of its total potential returns per unit of risk. New Perspective Fund is currently generating about 0.21 per unit of volatility. If you would invest  6,131  in New Perspective Fund on May 6, 2025 and sell it today you would earn a total of  571.00  from holding New Perspective Fund or generate 9.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.48%
Values	Daily Returns

NASDAQ TEST STOCK  vs.  New Perspective Fund

NASDAQ TEST STOCK

Risk-Adjusted Performance

Very Weak

Over the last 90 days NASDAQ TEST STOCK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, NASDAQ TEST is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

New Perspective

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in New Perspective Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, New Perspective may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with NASDAQ TEST and New Perspective

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

The idea behind NASDAQ TEST STOCK and New Perspective 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.