Correlation Between Invesco EQQQ and Baloise Holding
Can any of the company-specific risk be diversified away by investing in both Invesco EQQQ and Baloise 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 Baloise 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 Baloise Holding AG, you can compare the effects of market volatilities on Invesco EQQQ and Baloise 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 Baloise Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco EQQQ and Baloise Holding.
Diversification Opportunities for Invesco EQQQ and Baloise Holding
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Invesco and Baloise is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Invesco EQQQ NASDAQ 100 and Baloise Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baloise Holding AG 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 Baloise Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baloise Holding AG has no effect on the direction of Invesco EQQQ i.e., Invesco EQQQ and Baloise Holding go up and down completely randomly.
Pair Corralation between Invesco EQQQ and Baloise Holding
Assuming the 90 days trading horizon Invesco EQQQ NASDAQ 100 is expected to generate 1.03 times more return on investment than Baloise Holding. However, Invesco EQQQ is 1.03 times more volatile than Baloise Holding AG. It trades about 0.12 of its potential returns per unit of risk. Baloise Holding AG is currently generating about 0.05 per unit of risk. If you would invest 19,208 in Invesco EQQQ NASDAQ 100 on September 3, 2024 and sell it today you would earn a total of 16,412 from holding Invesco EQQQ NASDAQ 100 or generate 85.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco EQQQ NASDAQ 100 vs. Baloise Holding AG
Performance |
| Timeline |
| Invesco EQQQ NASDAQ |
| Baloise Holding AG |
Invesco EQQQ and Baloise Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco EQQQ and Baloise Holding
The main advantage of trading using opposite Invesco EQQQ and Baloise Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco EQQQ position performs unexpectedly, Baloise 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 Baloise Holding will offset losses from the drop in Baloise Holding's long position.The idea behind Invesco EQQQ NASDAQ 100 and Baloise 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.| Baloise Holding vs. Swiss Life Holding | Baloise Holding vs. Helvetia Holding AG | Baloise Holding vs. Swisscom AG | Baloise Holding vs. Zurich Insurance Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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