Correlation Between NASDAQ TEST and Callaway Golf

Can any of the company-specific risk be diversified away by investing in both NASDAQ TEST and Callaway Golf 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 Callaway Golf 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 Callaway Golf, you can compare the effects of market volatilities on NASDAQ TEST and Callaway Golf 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 Callaway Golf. Check out your portfolio center. Please also check ongoing floating volatility patterns of NASDAQ TEST and Callaway Golf.

Diversification Opportunities for NASDAQ TEST and Callaway Golf

0.1

Correlation Coefficient

NASDAQ TEST  Callaway Golf

Average diversification

The 3 months correlation between NASDAQ and Callaway is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding NASDAQ TEST STOCK and Callaway Golf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callaway Golf 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 Callaway Golf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Callaway Golf has no effect on the direction of NASDAQ TEST i.e., NASDAQ TEST and Callaway Golf go up and down completely randomly.

Pair Corralation between NASDAQ TEST and Callaway Golf

Assuming the 90 days horizon NASDAQ TEST STOCK is expected to generate 5.93 times more return on investment than Callaway Golf. However, NASDAQ TEST is 5.93 times more volatile than Callaway Golf. It trades about 0.1 of its potential returns per unit of risk. Callaway Golf is currently generating about 0.04 per unit of risk. If you would invest  2,506  in NASDAQ TEST STOCK on March 7, 2025 and sell it today you would lose (647.00) from holding NASDAQ TEST STOCK or give up 25.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	75.81%
Values	Daily Returns

NASDAQ TEST STOCK  vs.  Callaway Golf

NASDAQ TEST STOCK

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NASDAQ TEST STOCK are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, NASDAQ TEST unveiled solid returns over the last few months and may actually be approaching a breakup point.

Callaway Golf

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Callaway Golf are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, Callaway Golf may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with NASDAQ TEST and Callaway Golf

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

The idea behind NASDAQ TEST STOCK and Callaway Golf 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.