Correlation Between Invesco China and EMQQ Emerging
Can any of the company-specific risk be diversified away by investing in both Invesco China and EMQQ Emerging 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 China and EMQQ Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco China Technology and EMQQ The Emerging, you can compare the effects of market volatilities on Invesco China and EMQQ Emerging 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 China with a short position of EMQQ Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco China and EMQQ Emerging.
Diversification Opportunities for Invesco China and EMQQ Emerging
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and EMQQ is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Invesco China Technology and EMQQ The Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMQQ The Emerging and Invesco China 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 China Technology are associated (or correlated) with EMQQ Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMQQ The Emerging has no effect on the direction of Invesco China i.e., Invesco China and EMQQ Emerging go up and down completely randomly.
Pair Corralation between Invesco China and EMQQ Emerging
Given the investment horizon of 90 days Invesco China Technology is expected to generate 1.24 times more return on investment than EMQQ Emerging. However, Invesco China is 1.24 times more volatile than EMQQ The Emerging. It trades about 0.11 of its potential returns per unit of risk. EMQQ The Emerging is currently generating about 0.12 per unit of risk. If you would invest 4,066 in Invesco China Technology on December 27, 2024 and sell it today you would earn a total of 535.00 from holding Invesco China Technology or generate 13.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.36% |
Values | Daily Returns |
Invesco China Technology vs. EMQQ The Emerging
Performance |
Timeline |
Invesco China Technology |
EMQQ The Emerging |
Invesco China and EMQQ Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Invesco China and EMQQ Emerging
The main advantage of trading using opposite Invesco China and EMQQ Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco China position performs unexpectedly, EMQQ Emerging 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 EMQQ Emerging will offset losses from the drop in EMQQ Emerging's long position.Invesco China vs. KraneShares CSI China | Invesco China vs. iShares MSCI China | Invesco China vs. Global X MSCI | Invesco China vs. Xtrackers Harvest CSI |
EMQQ Emerging vs. Invesco China Technology | EMQQ Emerging vs. Amplify Online Retail | EMQQ Emerging vs. KraneShares CSI China | EMQQ Emerging vs. Global X MSCI |
Check out your portfolio center.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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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