Correlation Between Invesco QQQ and Chevron Corp
Can any of the company-specific risk be diversified away by investing in both Invesco QQQ and Chevron Corp 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 QQQ and Chevron Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco QQQ Trust and Chevron Corp, you can compare the effects of market volatilities on Invesco QQQ and Chevron Corp 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 QQQ with a short position of Chevron Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco QQQ and Chevron Corp.
Diversification Opportunities for Invesco QQQ and Chevron Corp
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Chevron is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Invesco QQQ Trust and Chevron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chevron Corp and Invesco QQQ 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 QQQ Trust are associated (or correlated) with Chevron Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chevron Corp has no effect on the direction of Invesco QQQ i.e., Invesco QQQ and Chevron Corp go up and down completely randomly.
Pair Corralation between Invesco QQQ and Chevron Corp
Considering the 90-day investment horizon Invesco QQQ Trust is expected to generate 0.78 times more return on investment than Chevron Corp. However, Invesco QQQ Trust is 1.28 times less risky than Chevron Corp. It trades about 0.07 of its potential returns per unit of risk. Chevron Corp is currently generating about 0.03 per unit of risk. If you would invest 36,262 in Invesco QQQ Trust on January 24, 2024 and sell it today you would earn a total of 5,620 from holding Invesco QQQ Trust or generate 15.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco QQQ Trust vs. Chevron Corp
Performance |
| Timeline |
| Invesco QQQ Trust |
| Chevron Corp |
Invesco QQQ and Chevron Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco QQQ and Chevron Corp
The main advantage of trading using opposite Invesco QQQ and Chevron Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco QQQ position performs unexpectedly, Chevron Corp 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 Chevron Corp will offset losses from the drop in Chevron Corp's long position.| Invesco QQQ vs. SPDR SP 500 | Invesco QQQ vs. Vanguard SP 500 | Invesco QQQ vs. NVIDIA | Invesco QQQ vs. SPDR Dow Jones |
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 Positions Ratings module to 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.
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