Correlation Between Invesco QQQ and Cabana Target
Can any of the company-specific risk be diversified away by investing in both Invesco QQQ and Cabana Target 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 Cabana Target 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 Cabana Target Drawdown, you can compare the effects of market volatilities on Invesco QQQ and Cabana Target 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 Cabana Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco QQQ and Cabana Target.
Diversification Opportunities for Invesco QQQ and Cabana Target
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Cabana is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Invesco QQQ Trust and Cabana Target Drawdown in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabana Target Drawdown 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 Cabana Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabana Target Drawdown has no effect on the direction of Invesco QQQ i.e., Invesco QQQ and Cabana Target go up and down completely randomly.
Pair Corralation between Invesco QQQ and Cabana Target
Considering the 90-day investment horizon Invesco QQQ Trust is expected to generate 3.1 times more return on investment than Cabana Target. However, Invesco QQQ is 3.1 times more volatile than Cabana Target Drawdown. It trades about 0.12 of its potential returns per unit of risk. Cabana Target Drawdown is currently generating about 0.22 per unit of risk. If you would invest 57,820 in Invesco QQQ Trust on September 7, 2025 and sell it today you would earn a total of 4,728 from holding Invesco QQQ Trust or generate 8.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco QQQ Trust vs. Cabana Target Drawdown
Performance |
| Timeline |
| Invesco QQQ Trust |
| Cabana Target Drawdown |
Invesco QQQ and Cabana Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco QQQ and Cabana Target
The main advantage of trading using opposite Invesco QQQ and Cabana Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco QQQ position performs unexpectedly, Cabana Target 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 Cabana Target will offset losses from the drop in Cabana Target's long position.| Invesco QQQ vs. iShares Russell 1000 | Invesco QQQ vs. iShares Russell Top | Invesco QQQ vs. Vanguard Mega Cap | Invesco QQQ vs. Invesco SP 500 |
| Cabana Target vs. Series Portfolios Trust | Cabana Target vs. First Trust Multi Asset | Cabana Target vs. Collaborative Investment Series | Cabana Target vs. Northern Lights |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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