Correlation Between Stealthgas and Nasdaq

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Stealthgas and Nasdaq 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 Stealthgas and Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stealthgas and Nasdaq, you can compare the effects of market volatilities on Stealthgas and Nasdaq 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 Stealthgas with a short position of Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stealthgas and Nasdaq.

Diversification Opportunities for Stealthgas and Nasdaq

-0.29
  Correlation Coefficient

Very good diversification

The 3 months correlation between Stealthgas and Nasdaq is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Stealthgas and Nasdaq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq and Stealthgas 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 Stealthgas are associated (or correlated) with Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq has no effect on the direction of Stealthgas i.e., Stealthgas and Nasdaq go up and down completely randomly.
    Optimize

Pair Corralation between Stealthgas and Nasdaq

Given the investment horizon of 90 days Stealthgas is expected to under-perform the Nasdaq. In addition to that, Stealthgas is 3.28 times more volatile than Nasdaq. It trades about -0.16 of its total potential returns per unit of risk. Nasdaq is currently generating about 0.23 per unit of volatility. If you would invest  1,109,915  in Nasdaq on May 16, 2022 and sell it today you would earn a total of  194,804  from holding Nasdaq or generate 17.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Stealthgas  vs.  Nasdaq

 Performance (%) 
       Timeline  

Stealthgas and Nasdaq Volatility Contrast

   Predicted Return Density   
       Returns  

Nasdaq

Pair trading matchups for Nasdaq

Ark Innovation vs. Nasdaq
Universal Health vs. Nasdaq
Rolls Royce vs. Nasdaq
Horizon Therapeutics vs. Nasdaq
Semiconductor Bear vs. Nasdaq
Nike vs. Nasdaq
Essential Properties vs. Nasdaq
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Nasdaq as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Nasdaq's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Nasdaq's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Nasdaq.

Pair Trading with Stealthgas and Nasdaq

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

Nasdaq

Pair trading matchups for Nasdaq

Ark Innovation vs. Nasdaq
Essential Properties vs. Nasdaq
Cto Realty vs. Nasdaq
Rolls Royce vs. Nasdaq
Horizon Therapeutics vs. Nasdaq
Prog Hldgs vs. Nasdaq
Universal Health vs. Nasdaq
Semiconductor Bear vs. Nasdaq
Olema Pharmaceuticals vs. Nasdaq
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Nasdaq as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Nasdaq's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Nasdaq's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Nasdaq.
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

Other Complementary Tools

Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go