Correlation Between Invesco Gold and Ultrabull Profund

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

By analyzing existing cross correlation between Invesco Gold Special and Ultrabull Profund Ultrabull, you can compare the effects of market volatilities on Invesco Gold and Ultrabull Profund 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 Gold with a short position of Ultrabull Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Gold and Ultrabull Profund.

Diversification Opportunities for Invesco Gold and Ultrabull Profund

0.29

Correlation Coefficient

Invesco Gold  Ultrabull Profund

Modest diversification

The 3 months correlation between Invesco and Ultrabull is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Gold Special and Ultrabull Profund Ultrabull in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrabull Profund and Invesco Gold 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 Gold Special are associated (or correlated) with Ultrabull Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrabull Profund has no effect on the direction of Invesco Gold i.e., Invesco Gold and Ultrabull Profund go up and down completely randomly.

Pair Corralation between Invesco Gold and Ultrabull Profund

Assuming the 90 days horizon Invesco Gold Special is expected to generate 1.26 times more return on investment than Ultrabull Profund. However, Invesco Gold is 1.26 times more volatile than Ultrabull Profund Ultrabull. It trades about 0.09 of its potential returns per unit of risk. Ultrabull Profund Ultrabull is currently generating about -0.23 per unit of risk. If you would invest  2,777  in Invesco Gold Special on November 29, 2024 and sell it today you would earn a total of  89.00  from holding Invesco Gold Special or generate 3.2% return on investment over 90 days.

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

Invesco Gold Special  vs.  Ultrabull Profund Ultrabull

Invesco Gold Special

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Gold Special are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Invesco Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ultrabull Profund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ultrabull Profund Ultrabull has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Invesco Gold and Ultrabull Profund

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

The idea behind Invesco Gold Special and Ultrabull Profund Ultrabull 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.