Correlation Between Invesco EQQQ and SSgA SPDR
Can any of the company-specific risk be diversified away by investing in both Invesco EQQQ and SSgA SPDR 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 SSgA SPDR 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 SSgA SPDR ETFs, you can compare the effects of market volatilities on Invesco EQQQ and SSgA SPDR 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 SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco EQQQ and SSgA SPDR.
Diversification Opportunities for Invesco EQQQ and SSgA SPDR
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and SSgA is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Invesco EQQQ NASDAQ 100 and SSgA SPDR ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR ETFs 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 SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR ETFs has no effect on the direction of Invesco EQQQ i.e., Invesco EQQQ and SSgA SPDR go up and down completely randomly.
Pair Corralation between Invesco EQQQ and SSgA SPDR
Assuming the 90 days trading horizon Invesco EQQQ NASDAQ 100 is expected to generate 1.46 times more return on investment than SSgA SPDR. However, Invesco EQQQ is 1.46 times more volatile than SSgA SPDR ETFs. It trades about 0.23 of its potential returns per unit of risk. SSgA SPDR ETFs is currently generating about -0.13 per unit of risk. If you would invest 45,730 in Invesco EQQQ NASDAQ 100 on August 25, 2024 and sell it today you would earn a total of 2,990 from holding Invesco EQQQ NASDAQ 100 or generate 6.54% 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. SSgA SPDR ETFs
Performance |
| Timeline |
| Invesco EQQQ NASDAQ |
| SSgA SPDR ETFs |
Invesco EQQQ and SSgA SPDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco EQQQ and SSgA SPDR
The main advantage of trading using opposite Invesco EQQQ and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco EQQQ position performs unexpectedly, SSgA SPDR 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 SSgA SPDR will offset losses from the drop in SSgA SPDR's long position.| Invesco EQQQ vs. Invesco FTSE RAFI | Invesco EQQQ vs. Invesco SP 500 | Invesco EQQQ vs. Invesco Markets III | Invesco EQQQ vs. Invesco Markets III |
| SSgA SPDR vs. Lyxor UCITS Japan | SSgA SPDR vs. Lyxor UCITS Japan | SSgA SPDR vs. Lyxor UCITS Stoxx | SSgA SPDR vs. Amundi CAC 40 |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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