Correlation Between Invesco EQQQ and Autoneum Holding

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

Diversification Opportunities for Invesco EQQQ and Autoneum Holding

-0.31

Correlation Coefficient

Invesco EQQQ  Autoneum Holding

Very good diversification

The 3 months correlation between Invesco and Autoneum is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Invesco EQQQ NASDAQ 100 and Autoneum Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autoneum Holding 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 Autoneum Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autoneum Holding has no effect on the direction of Invesco EQQQ i.e., Invesco EQQQ and Autoneum Holding go up and down completely randomly.

Pair Corralation between Invesco EQQQ and Autoneum Holding

Assuming the 90 days trading horizon Invesco EQQQ NASDAQ 100 is expected to under-perform the Autoneum Holding. But the etf apears to be less risky and, when comparing its historical volatility, Invesco EQQQ NASDAQ 100 is 1.09 times less risky than Autoneum Holding. The etf trades about -0.09 of its potential returns per unit of risk. The Autoneum Holding AG is currently generating about 0.56 of returns per unit of risk over similar time horizon. If you would invest  10,820  in Autoneum Holding AG on October 7, 2024 and sell it today you would earn a total of  1,080  from holding Autoneum Holding AG or generate 9.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Invesco EQQQ NASDAQ 100  vs.  Autoneum Holding AG

Invesco EQQQ NASDAQ

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco EQQQ NASDAQ 100 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Invesco EQQQ may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Autoneum Holding

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Autoneum Holding AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Autoneum Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Invesco EQQQ and Autoneum Holding

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

The idea behind Invesco EQQQ NASDAQ 100 and Autoneum Holding 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 Transaction History module to view history of all your transactions and understand their impact on performance.