Correlation Between Invesco BulletShares and Invesco

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

By analyzing existing cross correlation between Invesco BulletShares 2025 and Invesco, you can compare the effects of market volatilities on Invesco BulletShares and Invesco 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 Invesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco BulletShares and Invesco.

Diversification Opportunities for Invesco BulletShares and Invesco

0.0

Correlation Coefficient

Invesco BulletShares  Invesco

Pay attention - limited upside

The 3 months correlation between Invesco and Invesco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Invesco BulletShares 2025 and Invesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco 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 2025 are associated (or correlated) with Invesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco has no effect on the direction of Invesco BulletShares i.e., Invesco BulletShares and Invesco go up and down completely randomly.

Pair Corralation between Invesco BulletShares and Invesco

If you would invest  2,043  in Invesco BulletShares 2025 on November 28, 2024 and sell it today you would earn a total of  24.00  from holding Invesco BulletShares 2025 or generate 1.17% return on investment over 90 days.

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

Invesco BulletShares 2025  vs.  Invesco

Invesco BulletShares 2025

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco BulletShares 2025 are ranked lower than 36 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Invesco BulletShares is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Invesco

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward-looking indicators, Invesco 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 BulletShares and Invesco

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

The idea behind Invesco BulletShares 2025 and Invesco 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.