Correlation Between Invesco CurrencyShares and Running Oak

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

By analyzing existing cross correlation between Invesco CurrencyShares Japanese and Running Oak Efficient, you can compare the effects of market volatilities on Invesco CurrencyShares and Running Oak 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 CurrencyShares with a short position of Running Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco CurrencyShares and Running Oak.

Diversification Opportunities for Invesco CurrencyShares and Running Oak

-0.37

Correlation Coefficient

Invesco CurrencyShares  Running Oak

Very good diversification

The 3 months correlation between Invesco and Running is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Invesco CurrencyShares Japanes and Running Oak Efficient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Running Oak Efficient and Invesco CurrencyShares 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 CurrencyShares Japanese are associated (or correlated) with Running Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Running Oak Efficient has no effect on the direction of Invesco CurrencyShares i.e., Invesco CurrencyShares and Running Oak go up and down completely randomly.

Pair Corralation between Invesco CurrencyShares and Running Oak

Considering the 90-day investment horizon Invesco CurrencyShares Japanese is expected to generate 0.63 times more return on investment than Running Oak. However, Invesco CurrencyShares Japanese is 1.59 times less risky than Running Oak. It trades about 0.12 of its potential returns per unit of risk. Running Oak Efficient is currently generating about 0.0 per unit of risk. If you would invest  5,881  in Invesco CurrencyShares Japanese on December 29, 2024 and sell it today you would earn a total of  223.00  from holding Invesco CurrencyShares Japanese or generate 3.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Invesco CurrencyShares Japanes  vs.  Running Oak Efficient

Invesco CurrencyShares

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco CurrencyShares Japanese are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Invesco CurrencyShares is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Running Oak Efficient

Risk-Adjusted Performance

Very Weak

Over the last 90 days Running Oak Efficient has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Running Oak is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Invesco CurrencyShares and Running Oak

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

The idea behind Invesco CurrencyShares Japanese and Running Oak Efficient 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.