Correlation Between Invesco EQQQ and Schroder ImmoPLUS

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

Diversification Opportunities for Invesco EQQQ and Schroder ImmoPLUS

0.78

Correlation Coefficient

Invesco EQQQ  Schroder ImmoPLUS

Poor diversification

The 3 months correlation between Invesco and Schroder is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Invesco EQQQ NASDAQ 100 and Schroder ImmoPLUS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroder ImmoPLUS 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 Schroder ImmoPLUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroder ImmoPLUS has no effect on the direction of Invesco EQQQ i.e., Invesco EQQQ and Schroder ImmoPLUS go up and down completely randomly.

Pair Corralation between Invesco EQQQ and Schroder ImmoPLUS

Assuming the 90 days trading horizon Invesco EQQQ is expected to generate 1.2 times less return on investment than Schroder ImmoPLUS. But when comparing it to its historical volatility, Invesco EQQQ NASDAQ 100 is 1.2 times less risky than Schroder ImmoPLUS. It trades about 0.12 of its potential returns per unit of risk. Schroder ImmoPLUS is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  16,700  in Schroder ImmoPLUS on October 2, 2024 and sell it today you would earn a total of  1,350  from holding Schroder ImmoPLUS or generate 8.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Invesco EQQQ NASDAQ 100  vs.  Schroder ImmoPLUS

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 January 2025.

Schroder ImmoPLUS

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Schroder ImmoPLUS are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly sluggish forward indicators, Schroder ImmoPLUS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Invesco EQQQ and Schroder ImmoPLUS

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

The idea behind Invesco EQQQ NASDAQ 100 and Schroder ImmoPLUS 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.