Correlation Between Invesco NASDAQ and OMOM

Can any of the company-specific risk be diversified away by investing in both Invesco NASDAQ and OMOM 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 OMOM into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Invesco NASDAQ Next and OMOM, you can compare the effects of market volatilities on Invesco NASDAQ and OMOM 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 OMOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco NASDAQ and OMOM.

Diversification Opportunities for Invesco NASDAQ and OMOM

0.0

Correlation Coefficient

Invesco NASDAQ  OMOM

Pay attention - limited upside

The 3 months correlation between Invesco and OMOM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Invesco NASDAQ Next and OMOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OMOM 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 Next are associated (or correlated) with OMOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMOM has no effect on the direction of Invesco NASDAQ i.e., Invesco NASDAQ and OMOM go up and down completely randomly.

Pair Corralation between Invesco NASDAQ and OMOM

If you would invest (100.00) in OMOM on March 8, 2024 and sell it today you would earn a total of  100.00  from holding OMOM or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Invesco NASDAQ Next  vs.  OMOM

Invesco NASDAQ Next

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco NASDAQ Next has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Invesco NASDAQ is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

OMOM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OMOM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, OMOM is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Invesco NASDAQ and OMOM

The main advantage of trading using opposite Invesco NASDAQ and OMOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco NASDAQ position performs unexpectedly, OMOM 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 OMOM will offset losses from the drop in OMOM's long position.

The idea behind Invesco NASDAQ Next and OMOM pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.