Correlation Between Invesco EQQQ and Lyxor CAC
Can any of the company-specific risk be diversified away by investing in both Invesco EQQQ and Lyxor CAC 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 Lyxor CAC 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 Lyxor CAC 40, you can compare the effects of market volatilities on Invesco EQQQ and Lyxor CAC 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 Lyxor CAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco EQQQ and Lyxor CAC.
Diversification Opportunities for Invesco EQQQ and Lyxor CAC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Invesco and Lyxor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Invesco EQQQ NASDAQ 100 and Lyxor CAC 40 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor CAC 40 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 Lyxor CAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor CAC 40 has no effect on the direction of Invesco EQQQ i.e., Invesco EQQQ and Lyxor CAC go up and down completely randomly.
Pair Corralation between Invesco EQQQ and Lyxor CAC
If you would invest (100.00) in Invesco EQQQ NASDAQ 100 on August 30, 2024 and sell it today you would earn a total of 100.00 from holding Invesco EQQQ NASDAQ 100 or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Invesco EQQQ NASDAQ 100 vs. Lyxor CAC 40
Performance |
| Timeline |
| Invesco EQQQ NASDAQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Lyxor CAC 40 |
Invesco EQQQ and Lyxor CAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco EQQQ and Lyxor CAC
The main advantage of trading using opposite Invesco EQQQ and Lyxor CAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco EQQQ position performs unexpectedly, Lyxor CAC 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 Lyxor CAC will offset losses from the drop in Lyxor CAC's long position.The idea behind Invesco EQQQ NASDAQ 100 and Lyxor CAC 40 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.| Lyxor CAC vs. Amundi Index Solutions | Lyxor CAC vs. Amundi ETF PEA | Lyxor CAC vs. Amundi ETF PEA | Lyxor CAC vs. Amundi Index Solutions |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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