Correlation Between Invesco WilderHill and Global X

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

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

Diversification Opportunities for Invesco WilderHill and Global X

0.28

Correlation Coefficient

Invesco WilderHill  Global X

Modest diversification

The 3 months correlation between Invesco and Global is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Invesco WilderHill Clean and Global X Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Lithium and Invesco WilderHill 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 WilderHill Clean are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Lithium has no effect on the direction of Invesco WilderHill i.e., Invesco WilderHill and Global X go up and down completely randomly.

Pair Corralation between Invesco WilderHill and Global X

Considering the 90-day investment horizon Invesco WilderHill Clean is expected to under-perform the Global X. In addition to that, Invesco WilderHill is 1.9 times more volatile than Global X Lithium. It trades about -0.13 of its total potential returns per unit of risk. Global X Lithium is currently generating about -0.03 per unit of volatility. If you would invest  4,154  in Global X Lithium on December 28, 2024 and sell it today you would lose (129.00) from holding Global X Lithium or give up 3.11% of portfolio value over 90 days.

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

Invesco WilderHill Clean  vs.  Global X Lithium

Invesco WilderHill Clean

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco WilderHill Clean has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's fundamental drivers remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

Global X Lithium

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global X Lithium has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Global X is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Invesco WilderHill and Global X

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

The idea behind Invesco WilderHill Clean and Global X Lithium 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 Commodity Directory module to find actively traded commodities issued by global exchanges.