Correlation Between Invesco EQQQ and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both Invesco EQQQ and Lyxor UCITS 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 UCITS 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 UCITS FTSE, you can compare the effects of market volatilities on Invesco EQQQ and Lyxor UCITS 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 UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco EQQQ and Lyxor UCITS.
Diversification Opportunities for Invesco EQQQ and Lyxor UCITS
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Invesco and Lyxor is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Invesco EQQQ NASDAQ 100 and Lyxor UCITS FTSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS FTSE 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 UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor UCITS FTSE has no effect on the direction of Invesco EQQQ i.e., Invesco EQQQ and Lyxor UCITS go up and down completely randomly.
Pair Corralation between Invesco EQQQ and Lyxor UCITS
Assuming the 90 days trading horizon Invesco EQQQ NASDAQ 100 is expected to generate 0.88 times more return on investment than Lyxor UCITS. However, Invesco EQQQ NASDAQ 100 is 1.14 times less risky than Lyxor UCITS. It trades about 0.12 of its potential returns per unit of risk. Lyxor UCITS FTSE is currently generating about 0.04 per unit of risk. If you would invest 35,561 in Invesco EQQQ NASDAQ 100 on August 26, 2024 and sell it today you would earn a total of 13,159 from holding Invesco EQQQ NASDAQ 100 or generate 37.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco EQQQ NASDAQ 100 vs. Lyxor UCITS FTSE
Performance |
| Timeline |
| Invesco EQQQ NASDAQ |
| Lyxor UCITS FTSE |
Invesco EQQQ and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco EQQQ and Lyxor UCITS
The main advantage of trading using opposite Invesco EQQQ and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco EQQQ position performs unexpectedly, Lyxor UCITS 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 UCITS will offset losses from the drop in Lyxor UCITS's long position.| Invesco EQQQ vs. Lyxor UCITS Japan | Invesco EQQQ vs. Lyxor UCITS Stoxx | Invesco EQQQ vs. Gold Bullion Securities | Invesco EQQQ vs. Xtrackers MSCI Europe |
| Lyxor UCITS vs. Lyxor UCITS Japan | Lyxor UCITS vs. Lyxor UCITS Stoxx | Lyxor UCITS vs. Gold Bullion Securities | Lyxor UCITS vs. Xtrackers MSCI Europe |
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 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.
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