Correlation Between Invesco EQQQ and Invesco Quantitative

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

Diversification Opportunities for Invesco EQQQ and Invesco Quantitative

0.7

Correlation Coefficient

Invesco EQQQ  Invesco Quantitative

Poor diversification

The 3 months correlation between Invesco and Invesco is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Invesco EQQQ NASDAQ 100 and Invesco Quantitative Strats in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Quantitative 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 Invesco Quantitative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Quantitative has no effect on the direction of Invesco EQQQ i.e., Invesco EQQQ and Invesco Quantitative go up and down completely randomly.

Pair Corralation between Invesco EQQQ and Invesco Quantitative

Assuming the 90 days trading horizon Invesco EQQQ is expected to generate 4.81 times less return on investment than Invesco Quantitative. In addition to that, Invesco EQQQ is 2.12 times more volatile than Invesco Quantitative Strats. It trades about 0.01 of its total potential returns per unit of risk. Invesco Quantitative Strats is currently generating about 0.1 per unit of volatility. If you would invest  648.00  in Invesco Quantitative Strats on October 23, 2024 and sell it today you would earn a total of  7.00  from holding Invesco Quantitative Strats or generate 1.08% return on investment over 90 days.

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

Invesco EQQQ NASDAQ 100  vs.  Invesco Quantitative Strats

Invesco EQQQ NASDAQ

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco EQQQ NASDAQ 100 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Invesco EQQQ is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Invesco Quantitative

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Quantitative Strats are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Invesco Quantitative is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Invesco EQQQ and Invesco Quantitative

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

The idea behind Invesco EQQQ NASDAQ 100 and Invesco Quantitative Strats 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.