Correlation Between NYSE Composite and QQD
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and QQD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and QQD, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of QQD. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and QQD.
Diversification Opportunities for NYSE Composite and QQD
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and QQD is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and QQD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QQD and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and QQD go up and down completely randomly.
Pair Corralation between NYSE Composite and QQD
If you would invest 1,574,621 in NYSE Composite on September 12, 2024 and sell it today you would earn a total of 413,569 from holding NYSE Composite or generate 26.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.61% |
| Values | Daily Returns |
NYSE Composite vs. QQD
Performance |
| Timeline |
NYSE Composite and QQD Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
QQD
Pair trading matchups for QQD
Pair Trading with NYSE Composite and QQD
The main advantage of trading using opposite NYSE Composite and QQD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Teleflex Incorporated | NYSE Composite vs. Victorias Secret Co | NYSE Composite vs. Under Armour C | NYSE Composite vs. Steven Madden |
| QQD vs. iShares Factors Growth | QQD vs. Absolute Core Strategy | QQD vs. iShares ESG Advanced | QQD vs. PIMCO RAFI Dynamic |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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