Correlation Between Invesco Electric and Listed Funds

Can any of the company-specific risk be diversified away by investing in both Invesco Electric and Listed Funds 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 Listed Funds 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 Listed Funds Trust, you can compare the effects of market volatilities on Invesco Electric and Listed Funds 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 Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Electric and Listed Funds.

Diversification Opportunities for Invesco Electric and Listed Funds

0.26

Correlation Coefficient

Invesco Electric  Listed Funds

Modest diversification

The 3 months correlation between Invesco and Listed is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Electric Vehicle and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust 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 Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of Invesco Electric i.e., Invesco Electric and Listed Funds go up and down completely randomly.

Pair Corralation between Invesco Electric and Listed Funds

Given the investment horizon of 90 days Invesco Electric Vehicle is expected to generate 1.04 times more return on investment than Listed Funds. However, Invesco Electric is 1.04 times more volatile than Listed Funds Trust. It trades about 0.17 of its potential returns per unit of risk. Listed Funds Trust is currently generating about 0.11 per unit of risk. If you would invest  1,462  in Invesco Electric Vehicle on December 22, 2024 and sell it today you would earn a total of  136.00  from holding Invesco Electric Vehicle or generate 9.3% return on investment over 90 days.

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

Invesco Electric Vehicle  vs.  Listed Funds Trust

Invesco Electric Vehicle

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Electric Vehicle are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating primary indicators, Invesco Electric may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Listed Funds Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Listed Funds Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Listed Funds is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Invesco Electric and Listed Funds

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

The idea behind Invesco Electric Vehicle and Listed Funds 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.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.