Correlation Between Invesco QQQ and Digi International

Can any of the company-specific risk be diversified away by investing in both Invesco QQQ and Digi International 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 Digi International 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 Digi International, you can compare the effects of market volatilities on Invesco QQQ and Digi International 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 Digi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco QQQ and Digi International.

Diversification Opportunities for Invesco QQQ and Digi International

0.89

Correlation Coefficient

Invesco QQQ  Digi International

Very poor diversification

The 3 months correlation between Invesco and Digi is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Invesco QQQ Trust and Digi International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi International 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 Digi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digi International has no effect on the direction of Invesco QQQ i.e., Invesco QQQ and Digi International go up and down completely randomly.

Pair Corralation between Invesco QQQ and Digi International

Considering the 90-day investment horizon Invesco QQQ Trust is expected to generate 0.58 times more return on investment than Digi International. However, Invesco QQQ Trust is 1.73 times less risky than Digi International. It trades about 0.16 of its potential returns per unit of risk. Digi International is currently generating about 0.03 per unit of risk. If you would invest  60,325  in Invesco QQQ Trust on August 2, 2025 and sell it today you would earn a total of  2,582  from holding Invesco QQQ Trust or generate 4.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Invesco QQQ Trust  vs.  Digi International

Invesco QQQ Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco QQQ Trust are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Invesco QQQ may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Digi International

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Digi International are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady forward indicators, Digi International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Invesco QQQ and Digi International

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

The idea behind Invesco QQQ Trust and Digi International 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.