Correlation Between Invesco and IShares IBoxx

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

By analyzing existing cross correlation between Invesco and iShares iBoxx Investment, you can compare the effects of market volatilities on Invesco and IShares IBoxx 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 with a short position of IShares IBoxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco and IShares IBoxx.

Diversification Opportunities for Invesco and IShares IBoxx

0.0

Correlation Coefficient

Invesco  IShares IBoxx

Pay attention - limited upside

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

Pair Corralation between Invesco and IShares IBoxx

If you would invest  10,632  in iShares iBoxx Investment on December 29, 2024 and sell it today you would earn a total of  216.00  from holding iShares iBoxx Investment or generate 2.03% return on investment over 90 days.

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

Invesco  vs.  iShares iBoxx Investment

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.

iShares iBoxx Investment

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares iBoxx Investment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, IShares IBoxx is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Invesco and IShares IBoxx

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

The idea behind Invesco and iShares iBoxx Investment 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 Commodity Directory module to find actively traded commodities issued by global exchanges.