Correlation Between Invesco NASDAQ and IndexIQ
Can any of the company-specific risk be diversified away by investing in both Invesco NASDAQ and IndexIQ 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 NASDAQ and IndexIQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco NASDAQ 100 and IndexIQ, you can compare the effects of market volatilities on Invesco NASDAQ and IndexIQ 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 NASDAQ with a short position of IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco NASDAQ and IndexIQ.
Diversification Opportunities for Invesco NASDAQ and IndexIQ
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and IndexIQ is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Invesco NASDAQ 100 and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ and Invesco NASDAQ 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 NASDAQ 100 are associated (or correlated) with IndexIQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IndexIQ has no effect on the direction of Invesco NASDAQ i.e., Invesco NASDAQ and IndexIQ go up and down completely randomly.
Pair Corralation between Invesco NASDAQ and IndexIQ
If you would invest 20,389 in Invesco NASDAQ 100 on September 19, 2024 and sell it today you would earn a total of 1,483 from holding Invesco NASDAQ 100 or generate 7.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 2.38% |
Values | Daily Returns |
Invesco NASDAQ 100 vs. IndexIQ
Performance |
Timeline |
Invesco NASDAQ 100 |
IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Invesco NASDAQ and IndexIQ Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Invesco NASDAQ and IndexIQ
The main advantage of trading using opposite Invesco NASDAQ and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco NASDAQ position performs unexpectedly, IndexIQ 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 IndexIQ will offset losses from the drop in IndexIQ's long position.Invesco NASDAQ vs. Invesco NASDAQ Next | Invesco NASDAQ vs. SPDR Portfolio SP | Invesco NASDAQ vs. SPDR Portfolio SP | Invesco NASDAQ vs. Schwab Dividend Equity |
IndexIQ vs. IQ Hedge Multi Strategy | IndexIQ vs. IQ Merger Arbitrage | IndexIQ vs. WisdomTree Emerging Currency | IndexIQ vs. ProShares Large Cap |
Check out your portfolio center.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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