Correlation Between IShares Core and QQD
Can any of the company-specific risk be diversified away by investing in both IShares Core and QQD 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 Core and QQD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and QQD, you can compare the effects of market volatilities on IShares Core and QQD 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 Core with a short position of QQD. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and QQD.
Diversification Opportunities for IShares Core and QQD
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and QQD is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and QQD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QQD and IShares Core 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 Core SP are associated (or correlated) with QQD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QQD has no effect on the direction of IShares Core i.e., IShares Core and QQD go up and down completely randomly.
Pair Corralation between IShares Core and QQD
If you would invest 12,004 in iShares Core SP on September 1, 2024 and sell it today you would earn a total of 1,896 from holding iShares Core SP or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.79% |
| Values | Daily Returns |
iShares Core SP vs. QQD
Performance |
| Timeline |
| iShares Core SP |
| QQD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares Core and QQD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and QQD
The main advantage of trading using opposite IShares Core and QQD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, QQD 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 QQD will offset losses from the drop in QQD's long position.| IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares Russell Top | IShares Core vs. iShares Core MSCI |
| QQD vs. Vanguard Growth Index | QQD vs. iShares Russell 1000 | QQD vs. iShares SP 500 | QQD vs. iShares Core SP |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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