Correlation Between Invesco CoinShares and Invesco MSCI

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

By analyzing existing cross correlation between Invesco CoinShares Global and Invesco MSCI USA, you can compare the effects of market volatilities on Invesco CoinShares and Invesco MSCI 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 CoinShares with a short position of Invesco MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco CoinShares and Invesco MSCI.

Diversification Opportunities for Invesco CoinShares and Invesco MSCI

0.89

Correlation Coefficient

Invesco CoinShares  Invesco MSCI

Very poor diversification

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

Pair Corralation between Invesco CoinShares and Invesco MSCI

Assuming the 90 days trading horizon Invesco CoinShares Global is expected to under-perform the Invesco MSCI. In addition to that, Invesco CoinShares is 3.09 times more volatile than Invesco MSCI USA. It trades about -0.08 of its total potential returns per unit of risk. Invesco MSCI USA is currently generating about -0.05 per unit of volatility. If you would invest  8,998  in Invesco MSCI USA on December 24, 2024 and sell it today you would lose (293.00) from holding Invesco MSCI USA or give up 3.26% of portfolio value over 90 days.

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

Invesco CoinShares Global  vs.  Invesco MSCI USA

Invesco CoinShares Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco CoinShares Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Etf's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

Invesco MSCI USA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco MSCI USA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Invesco MSCI is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Invesco CoinShares and Invesco MSCI

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

The idea behind Invesco CoinShares Global and Invesco MSCI USA 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.