Correlation Between Invesco Dynamic and KraneShares Electric

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

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

Diversification Opportunities for Invesco Dynamic and KraneShares Electric

-0.04

Correlation Coefficient

Invesco Dynamic  KraneShares Electric

Good diversification

The 3 months correlation between Invesco and KraneShares is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Dynamic Food and KraneShares Electric Vehicles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Electric and Invesco Dynamic 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 Dynamic Food are associated (or correlated) with KraneShares Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Electric has no effect on the direction of Invesco Dynamic i.e., Invesco Dynamic and KraneShares Electric go up and down completely randomly.

Pair Corralation between Invesco Dynamic and KraneShares Electric

Considering the 90-day investment horizon Invesco Dynamic is expected to generate 1.72 times less return on investment than KraneShares Electric. But when comparing it to its historical volatility, Invesco Dynamic Food is 3.34 times less risky than KraneShares Electric. It trades about 0.09 of its potential returns per unit of risk. KraneShares Electric Vehicles is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,024  in KraneShares Electric Vehicles on September 15, 2024 and sell it today you would earn a total of  210.00  from holding KraneShares Electric Vehicles or generate 10.38% return on investment over 90 days.

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

Invesco Dynamic Food  vs.  KraneShares Electric Vehicles

Invesco Dynamic Food

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Dynamic Food are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady fundamental drivers, Invesco Dynamic is not utilizing all of its potentials. The newest stock price chaos, may contribute to medium-term losses for the stakeholders.

KraneShares Electric

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KraneShares Electric Vehicles are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, KraneShares Electric unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Invesco Dynamic and KraneShares Electric

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

The idea behind Invesco Dynamic Food and KraneShares Electric Vehicles 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.