Correlation Between Invesco EQQQ and Ams AG

Can any of the company-specific risk be diversified away by investing in both Invesco EQQQ and Ams AG 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 Invesco EQQQ and Ams AG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Invesco EQQQ NASDAQ 100 and Ams AG, you can compare the effects of market volatilities on Invesco EQQQ and Ams AG 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 Invesco EQQQ with a short position of Ams AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco EQQQ and Ams AG.

Diversification Opportunities for Invesco EQQQ and Ams AG

-0.41

Correlation Coefficient

Invesco EQQQ  Ams AG

Very good diversification

The 3 months correlation between Invesco and Ams is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Invesco EQQQ NASDAQ 100 and Ams AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ams AG and Invesco EQQQ 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 Invesco EQQQ NASDAQ 100 are associated (or correlated) with Ams AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ams AG has no effect on the direction of Invesco EQQQ i.e., Invesco EQQQ and Ams AG go up and down completely randomly.

Pair Corralation between Invesco EQQQ and Ams AG

Assuming the 90 days trading horizon Invesco EQQQ NASDAQ 100 is expected to generate 0.25 times more return on investment than Ams AG. However, Invesco EQQQ NASDAQ 100 is 3.99 times less risky than Ams AG. It trades about 0.12 of its potential returns per unit of risk. Ams AG is currently generating about -0.07 per unit of risk. If you would invest  19,384  in Invesco EQQQ NASDAQ 100 on October 11, 2024 and sell it today you would earn a total of  16,741  from holding Invesco EQQQ NASDAQ 100 or generate 86.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Invesco EQQQ NASDAQ 100  vs.  Ams AG

Invesco EQQQ NASDAQ

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco EQQQ NASDAQ 100 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Invesco EQQQ is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Ams AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ams AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Invesco EQQQ and Ams AG

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

The idea behind Invesco EQQQ NASDAQ 100 and Ams AG 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.