Correlation Between Invesco QQQ and United States
Can any of the company-specific risk be diversified away by investing in both Invesco QQQ and United States 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 United States 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 United States 12, you can compare the effects of market volatilities on Invesco QQQ and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco QQQ and United States.
Diversification Opportunities for Invesco QQQ and United States
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Invesco and United is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Invesco QQQ Trust and United States 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States 12 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States 12 has no effect on the direction of Invesco QQQ i.e., Invesco QQQ and United States go up and down completely randomly.
Pair Corralation between Invesco QQQ and United States
Considering the 90-day investment horizon Invesco QQQ Trust is expected to generate 0.75 times more return on investment than United States. However, Invesco QQQ Trust is 1.34 times less risky than United States. It trades about 0.07 of its potential returns per unit of risk. United States 12 is currently generating about 0.02 per unit of risk. If you would invest 28,343 in Invesco QQQ Trust on January 25, 2024 and sell it today you would earn a total of 14,308 from holding Invesco QQQ Trust or generate 50.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco QQQ Trust vs. United States 12
Performance |
| Timeline |
| Invesco QQQ Trust |
| United States 12 |
Invesco QQQ and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco QQQ and United States
The main advantage of trading using opposite Invesco QQQ and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco QQQ position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Invesco QQQ vs. iShares Small Cap | Invesco QQQ vs. Pacer Cash Cows | Invesco QQQ vs. GXO Logistics | Invesco QQQ vs. Amplify CWP Enhanced |
| United States vs. HUMANA INC | United States vs. Aquagold International | United States vs. Barloworld Ltd ADR | United States vs. Morningstar Unconstrained Allocation |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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