Correlation Between Invesco QQQ and IShares Short
Can any of the company-specific risk be diversified away by investing in both Invesco QQQ and IShares Short 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 IShares Short 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 iShares Short Maturity, you can compare the effects of market volatilities on Invesco QQQ and IShares Short 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 IShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco QQQ and IShares Short.
Diversification Opportunities for Invesco QQQ and IShares Short
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and IShares is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Invesco QQQ Trust and iShares Short Maturity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Short Maturity 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 IShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Short Maturity has no effect on the direction of Invesco QQQ i.e., Invesco QQQ and IShares Short go up and down completely randomly.
Pair Corralation between Invesco QQQ and IShares Short
Considering the 90-day investment horizon Invesco QQQ Trust is expected to generate 6.08 times more return on investment than IShares Short. However, Invesco QQQ is 6.08 times more volatile than iShares Short Maturity. It trades about 0.01 of its potential returns per unit of risk. iShares Short Maturity is currently generating about -0.01 per unit of risk. If you would invest 43,748 in Invesco QQQ Trust on January 17, 2024 and sell it today you would earn a total of 79.00 from holding Invesco QQQ Trust or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Invesco QQQ Trust vs. iShares Short Maturity
Performance |
| Timeline |
| Invesco QQQ Trust |
| iShares Short Maturity |
Invesco QQQ and IShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco QQQ and IShares Short
The main advantage of trading using opposite Invesco QQQ and IShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco QQQ position performs unexpectedly, IShares Short 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 Short will offset losses from the drop in IShares Short's long position.| Invesco QQQ vs. HUMANA INC | Invesco QQQ vs. Sparta Capital | Invesco QQQ vs. T Rowe Price | Invesco QQQ vs. Bondbloxx ETF Trust |
| IShares Short vs. First Trust Low | IShares Short vs. HUMANA INC | IShares Short vs. Morningstar Unconstrained Allocation | IShares Short vs. Thrivent High Yield |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |