Correlation Between Invesco Electric and Abrdn ETFs

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

By analyzing existing cross correlation between Invesco Electric Vehicle and abrdn ETFs , you can compare the effects of market volatilities on Invesco Electric and Abrdn ETFs 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 Electric with a short position of Abrdn ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Electric and Abrdn ETFs.

Diversification Opportunities for Invesco Electric and Abrdn ETFs

0.56

Correlation Coefficient

Invesco Electric  Abrdn ETFs

Very weak diversification

The 3 months correlation between Invesco and Abrdn is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Electric Vehicle and abrdn ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn ETFs and Invesco Electric 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 Electric Vehicle are associated (or correlated) with Abrdn ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn ETFs has no effect on the direction of Invesco Electric i.e., Invesco Electric and Abrdn ETFs go up and down completely randomly.

Pair Corralation between Invesco Electric and Abrdn ETFs

Given the investment horizon of 90 days Invesco Electric Vehicle is expected to generate 1.0 times more return on investment than Abrdn ETFs. However, Invesco Electric Vehicle is 1.0 times less risky than Abrdn ETFs. It trades about -0.13 of its potential returns per unit of risk. abrdn ETFs is currently generating about -0.16 per unit of risk. If you would invest  1,535  in Invesco Electric Vehicle on October 6, 2024 and sell it today you would lose (87.00) from holding Invesco Electric Vehicle or give up 5.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.62%
Values	Daily Returns

Invesco Electric Vehicle  vs.  abrdn ETFs

Invesco Electric Vehicle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Electric Vehicle has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

abrdn ETFs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days abrdn ETFs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Etf's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Invesco Electric and Abrdn ETFs

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

The idea behind Invesco Electric Vehicle and abrdn ETFs 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 Transaction History module to view history of all your transactions and understand their impact on performance.