Correlation Between IShares Corp and Invesco EQQQ
Can any of the company-specific risk be diversified away by investing in both IShares Corp and Invesco EQQQ 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 IShares Corp and Invesco EQQQ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Corp Bond and Invesco EQQQ NASDAQ 100, you can compare the effects of market volatilities on IShares Corp and Invesco EQQQ 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 IShares Corp with a short position of Invesco EQQQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Corp and Invesco EQQQ.
Diversification Opportunities for IShares Corp and Invesco EQQQ
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Invesco is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding iShares Corp Bond and Invesco EQQQ NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco EQQQ NASDAQ and IShares Corp 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 iShares Corp Bond are associated (or correlated) with Invesco EQQQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco EQQQ NASDAQ has no effect on the direction of IShares Corp i.e., IShares Corp and Invesco EQQQ go up and down completely randomly.
Pair Corralation between IShares Corp and Invesco EQQQ
Assuming the 90 days trading horizon IShares Corp is expected to generate 6.07 times less return on investment than Invesco EQQQ. But when comparing it to its historical volatility, iShares Corp Bond is 5.98 times less risky than Invesco EQQQ. It trades about 0.11 of its potential returns per unit of risk. Invesco EQQQ NASDAQ 100 is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 20,025 in Invesco EQQQ NASDAQ 100 on October 13, 2024 and sell it today you would earn a total of 15,370 from holding Invesco EQQQ NASDAQ 100 or generate 76.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
iShares Corp Bond vs. Invesco EQQQ NASDAQ 100
Performance |
| Timeline |
| iShares Corp Bond |
| Invesco EQQQ NASDAQ |
IShares Corp and Invesco EQQQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Corp and Invesco EQQQ
The main advantage of trading using opposite IShares Corp and Invesco EQQQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Corp position performs unexpectedly, Invesco EQQQ 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 Invesco EQQQ will offset losses from the drop in Invesco EQQQ's long position.| IShares Corp vs. iShares Corp Bond | IShares Corp vs. iShares Emerging Asia | IShares Corp vs. iShares MSCI Global | IShares Corp vs. iShares VII PLC |
| Invesco EQQQ vs. UBSFund Solutions MSCI | Invesco EQQQ vs. Vanguard SP 500 | Invesco EQQQ vs. iShares Core SP | Invesco EQQQ vs. iShares Core MSCI |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |