Correlation Between Invesco Actively and Harbor ETF

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

By analyzing existing cross correlation between Invesco Actively Managed and Harbor ETF Trust, you can compare the effects of market volatilities on Invesco Actively and Harbor ETF 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 Actively with a short position of Harbor ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Actively and Harbor ETF.

Diversification Opportunities for Invesco Actively and Harbor ETF

0.9

Correlation Coefficient

Invesco Actively  Harbor ETF

Almost no diversification

The 3 months correlation between Invesco and Harbor is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Actively Managed and Harbor ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor ETF Trust and Invesco Actively 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 Actively Managed are associated (or correlated) with Harbor ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor ETF Trust has no effect on the direction of Invesco Actively i.e., Invesco Actively and Harbor ETF go up and down completely randomly.

Pair Corralation between Invesco Actively and Harbor ETF

Given the investment horizon of 90 days Invesco Actively is expected to generate 1.15 times less return on investment than Harbor ETF. But when comparing it to its historical volatility, Invesco Actively Managed is 1.33 times less risky than Harbor ETF. It trades about 0.22 of its potential returns per unit of risk. Harbor ETF Trust is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,895  in Harbor ETF Trust on December 21, 2024 and sell it today you would earn a total of  185.72  from holding Harbor ETF Trust or generate 9.8% return on investment over 90 days.

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

Invesco Actively Managed  vs.  Harbor ETF Trust

Invesco Actively Managed

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Actively Managed are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Invesco Actively may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Harbor ETF Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor ETF Trust are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, Harbor ETF may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Invesco Actively and Harbor ETF

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

The idea behind Invesco Actively Managed and Harbor ETF Trust 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.