Correlation Between IShares Factors and QQD
Can any of the company-specific risk be diversified away by investing in both IShares Factors 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 Factors and QQD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Factors Growth and QQD, you can compare the effects of market volatilities on IShares Factors 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 Factors with a short position of QQD. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Factors and QQD.
Diversification Opportunities for IShares Factors and QQD
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and QQD is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding iShares Factors Growth and QQD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QQD and IShares Factors 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 Factors Growth 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 Factors i.e., IShares Factors and QQD go up and down completely randomly.
Pair Corralation between IShares Factors and QQD
If you would invest 3,595 in iShares Factors Growth on September 12, 2024 and sell it today you would earn a total of 2,139 from holding iShares Factors Growth or generate 59.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.61% |
| Values | Daily Returns |
iShares Factors Growth vs. QQD
Performance |
| Timeline |
| iShares Factors Growth |
| QQD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares Factors and QQD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Factors and QQD
The main advantage of trading using opposite IShares Factors and QQD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Factors 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 Factors vs. iShares ESG Advanced | IShares Factors vs. iShares Focused Value | IShares Factors vs. iShares MSCI USA |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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