Correlation Between Invesco Optimum and Direxion

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

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

Diversification Opportunities for Invesco Optimum and Direxion

0.0

Correlation Coefficient

Invesco Optimum  Direxion

Pay attention - limited upside

The 3 months correlation between Invesco and Direxion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Optimum Yield and Direxion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion and Invesco Optimum 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 Optimum Yield are associated (or correlated) with Direxion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion has no effect on the direction of Invesco Optimum i.e., Invesco Optimum and Direxion go up and down completely randomly.

Pair Corralation between Invesco Optimum and Direxion

If you would invest  2,127  in Direxion on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Direxion or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.44%
Values	Daily Returns

Invesco Optimum Yield  vs.  Direxion

Invesco Optimum Yield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Optimum Yield has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Invesco Optimum is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Direxion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Direxion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, Direxion is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Invesco Optimum and Direxion

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

The idea behind Invesco Optimum Yield and Direxion 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..