Correlation Between Invesco EQQQ and Zug Estates

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

Diversification Opportunities for Invesco EQQQ and Zug Estates

-0.52

Correlation Coefficient

Invesco EQQQ  Zug Estates

Excellent diversification

The 3 months correlation between Invesco and Zug is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Invesco EQQQ NASDAQ 100 and Zug Estates Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zug Estates 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 Zug Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zug Estates Holding has no effect on the direction of Invesco EQQQ i.e., Invesco EQQQ and Zug Estates go up and down completely randomly.

Pair Corralation between Invesco EQQQ and Zug Estates

Assuming the 90 days trading horizon Invesco EQQQ NASDAQ 100 is expected to under-perform the Zug Estates. But the etf apears to be less risky and, when comparing its historical volatility, Invesco EQQQ NASDAQ 100 is 1.05 times less risky than Zug Estates. The etf trades about -0.1 of its potential returns per unit of risk. The Zug Estates Holding is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  203,000  in Zug Estates Holding on December 22, 2024 and sell it today you would earn a total of  10,000  from holding Zug Estates Holding or generate 4.93% return on investment over 90 days.

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

Invesco EQQQ NASDAQ 100  vs.  Zug Estates Holding

Invesco EQQQ NASDAQ

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco EQQQ NASDAQ 100 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Etf's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Zug Estates Holding

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zug Estates Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Zug Estates 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 Zug Estates

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

The idea behind Invesco EQQQ NASDAQ 100 and Zug Estates Holding 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.