Correlation Between Invesco WilderHill and UST Inc

Can any of the company-specific risk be diversified away by investing in both Invesco WilderHill and UST Inc 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 UST Inc 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 ProShares Ultra 7 10, you can compare the effects of market volatilities on Invesco WilderHill and UST Inc 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 UST Inc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco WilderHill and UST Inc.

Diversification Opportunities for Invesco WilderHill and UST Inc

-0.88

Correlation Coefficient

Invesco WilderHill  UST Inc

Pay attention - limited upside

The 3 months correlation between Invesco and UST is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Invesco WilderHill Clean and ProShares Ultra 7 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra 7 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 UST Inc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra 7 has no effect on the direction of Invesco WilderHill i.e., Invesco WilderHill and UST Inc go up and down completely randomly.

Pair Corralation between Invesco WilderHill and UST Inc

Considering the 90-day investment horizon Invesco WilderHill Clean is expected to under-perform the UST Inc. In addition to that, Invesco WilderHill is 2.9 times more volatile than ProShares Ultra 7 10. It trades about -0.14 of its total potential returns per unit of risk. ProShares Ultra 7 10 is currently generating about 0.11 per unit of volatility. If you would invest  4,041  in ProShares Ultra 7 10 on December 27, 2024 and sell it today you would earn a total of  231.00  from holding ProShares Ultra 7 10 or generate 5.72% return on investment over 90 days.

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

Invesco WilderHill Clean  vs.  ProShares Ultra 7 10

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.

ProShares Ultra 7

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Ultra 7 10 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, UST Inc is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Invesco WilderHill and UST Inc

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

The idea behind Invesco WilderHill Clean and ProShares Ultra 7 10 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.