Correlation Between Invesco Global and ProShares

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

By analyzing existing cross correlation between Invesco Global Clean and ProShares DJ Brookfield, you can compare the effects of market volatilities on Invesco Global and ProShares 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 Global with a short position of ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Global and ProShares.

Diversification Opportunities for Invesco Global and ProShares

0.22

Correlation Coefficient

Invesco Global  ProShares

Modest diversification

The 3 months correlation between Invesco and ProShares is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Global Clean and ProShares DJ Brookfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares DJ Brookfield and Invesco Global 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 Global Clean are associated (or correlated) with ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares DJ Brookfield has no effect on the direction of Invesco Global i.e., Invesco Global and ProShares go up and down completely randomly.

Pair Corralation between Invesco Global and ProShares

Considering the 90-day investment horizon Invesco Global Clean is expected to generate 1.77 times more return on investment than ProShares. However, Invesco Global is 1.77 times more volatile than ProShares DJ Brookfield. It trades about 0.01 of its potential returns per unit of risk. ProShares DJ Brookfield is currently generating about -0.03 per unit of risk. If you would invest  1,167  in Invesco Global Clean on October 21, 2024 and sell it today you would earn a total of  0.00  from holding Invesco Global Clean or generate 0.0% return on investment over 90 days.

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

Invesco Global Clean  vs.  ProShares DJ Brookfield

Invesco Global Clean

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Global Clean has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Etf's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

ProShares DJ Brookfield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProShares DJ Brookfield has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, ProShares is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Invesco Global and ProShares

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

The idea behind Invesco Global Clean and ProShares DJ Brookfield 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.