Correlation Between Invesco BulletShares and Saba Capital

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

By analyzing existing cross correlation between Invesco BulletShares 2024 and Saba Capital Income, you can compare the effects of market volatilities on Invesco BulletShares and Saba Capital 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 BulletShares with a short position of Saba Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco BulletShares and Saba Capital.

Diversification Opportunities for Invesco BulletShares and Saba Capital

0.91

Correlation Coefficient

Invesco BulletShares  Saba Capital

Almost no diversification

The 3 months correlation between Invesco and Saba is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Invesco BulletShares 2024 and Saba Capital Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saba Capital Income and Invesco BulletShares 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 BulletShares 2024 are associated (or correlated) with Saba Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saba Capital Income has no effect on the direction of Invesco BulletShares i.e., Invesco BulletShares and Saba Capital go up and down completely randomly.

Pair Corralation between Invesco BulletShares and Saba Capital

Given the investment horizon of 90 days Invesco BulletShares is expected to generate 8.09 times less return on investment than Saba Capital. But when comparing it to its historical volatility, Invesco BulletShares 2024 is 38.28 times less risky than Saba Capital. It trades about 0.62 of its potential returns per unit of risk. Saba Capital Income is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  864.00  in Saba Capital Income on September 22, 2024 and sell it today you would earn a total of  25.00  from holding Saba Capital Income or generate 2.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	90.48%
Values	Daily Returns

Invesco BulletShares 2024  vs.  Saba Capital Income

Invesco BulletShares 2024

Risk-Adjusted Performance

48 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco BulletShares 2024 are ranked lower than 48 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Invesco BulletShares is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Saba Capital Income

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Saba Capital Income are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental drivers, Saba Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Invesco BulletShares and Saba Capital

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

The idea behind Invesco BulletShares 2024 and Saba Capital Income 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..