Correlation Between Invesco NASDAQ and EA Series
Can any of the company-specific risk be diversified away by investing in both Invesco NASDAQ and EA Series 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 EA Series 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 EA Series Trust, you can compare the effects of market volatilities on Invesco NASDAQ and EA Series 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 EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco NASDAQ and EA Series.
Diversification Opportunities for Invesco NASDAQ and EA Series
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and STXG is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Invesco NASDAQ 100 and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series 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 EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of Invesco NASDAQ i.e., Invesco NASDAQ and EA Series go up and down completely randomly.
Pair Corralation between Invesco NASDAQ and EA Series
Given the investment horizon of 90 days Invesco NASDAQ is expected to generate 1.48 times less return on investment than EA Series. In addition to that, Invesco NASDAQ is 1.15 times more volatile than EA Series Trust. It trades about 0.02 of its total potential returns per unit of risk. EA Series Trust is currently generating about 0.04 per unit of volatility. If you would invest 4,436 in EA Series Trust on October 24, 2024 and sell it today you would earn a total of 29.00 from holding EA Series Trust or generate 0.65% 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. EA Series Trust
Performance |
| Timeline |
| Invesco NASDAQ 100 |
| EA Series Trust |
Invesco NASDAQ and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco NASDAQ and EA Series
The main advantage of trading using opposite Invesco NASDAQ and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco NASDAQ position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.| Invesco NASDAQ vs. Invesco NASDAQ Next | Invesco NASDAQ vs. SPDR Portfolio SP | Invesco NASDAQ vs. SPDR Portfolio SP | Invesco NASDAQ vs. Schwab Dividend Equity |
| EA Series vs. EA Series Trust | EA Series vs. EA Series Trust | EA Series vs. EA Series Trust | EA Series vs. EA Series Trust |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |