Correlation Between Invesco NASDAQ and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Invesco NASDAQ and IShares Trust 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 NASDAQ and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco NASDAQ 100 and iShares Trust , you can compare the effects of market volatilities on Invesco NASDAQ and IShares Trust 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 NASDAQ with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco NASDAQ and IShares Trust.
Diversification Opportunities for Invesco NASDAQ and IShares Trust
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Invesco and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Invesco NASDAQ 100 and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and Invesco NASDAQ 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 NASDAQ 100 are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Invesco NASDAQ i.e., Invesco NASDAQ and IShares Trust go up and down completely randomly.
Pair Corralation between Invesco NASDAQ and IShares Trust
Given the investment horizon of 90 days Invesco NASDAQ is expected to generate 1.38 times less return on investment than IShares Trust. In addition to that, Invesco NASDAQ is 1.04 times more volatile than iShares Trust . It trades about 0.1 of its total potential returns per unit of risk. iShares Trust is currently generating about 0.14 per unit of volatility. If you would invest 4,229 in iShares Trust on August 27, 2024 and sell it today you would earn a total of 135.00 from holding iShares Trust or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco NASDAQ 100 vs. iShares Trust
Performance |
| Timeline |
| Invesco NASDAQ 100 |
| iShares Trust |
Invesco NASDAQ and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco NASDAQ and IShares Trust
The main advantage of trading using opposite Invesco NASDAQ and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco NASDAQ position performs unexpectedly, IShares Trust 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 IShares Trust will offset losses from the drop in IShares Trust's long position.| Invesco NASDAQ vs. Invesco Dynamic Large | Invesco NASDAQ vs. Perella Weinberg Partners | Invesco NASDAQ vs. HUMANA INC | Invesco NASDAQ vs. Aquagold International |
| IShares Trust vs. Cambria Micro And | IShares Trust vs. Invesco Actively Managed | IShares Trust vs. EMCS | IShares Trust vs. Research Affiliates Deletions |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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