Correlation Between ProShares Global and Invesco Dynamic

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

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

Diversification Opportunities for ProShares Global and Invesco Dynamic

0.26

Correlation Coefficient

ProShares Global  Invesco Dynamic

Modest diversification

The 3 months correlation between ProShares and Invesco is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Global Listed and Invesco Dynamic Building in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Dynamic Building and ProShares 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 ProShares Global Listed are associated (or correlated) with Invesco Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Dynamic Building has no effect on the direction of ProShares Global i.e., ProShares Global and Invesco Dynamic go up and down completely randomly.

Pair Corralation between ProShares Global and Invesco Dynamic

Considering the 90-day investment horizon ProShares Global Listed is expected to generate 0.47 times more return on investment than Invesco Dynamic. However, ProShares Global Listed is 2.14 times less risky than Invesco Dynamic. It trades about -0.01 of its potential returns per unit of risk. Invesco Dynamic Building is currently generating about -0.1 per unit of risk. If you would invest  2,743  in ProShares Global Listed on December 29, 2024 and sell it today you would lose (18.00) from holding ProShares Global Listed or give up 0.66% of portfolio value over 90 days.

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

ProShares Global Listed  vs.  Invesco Dynamic Building

ProShares Global Listed

Risk-Adjusted Performance

Very Weak

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

Invesco Dynamic Building

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco Dynamic Building has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Etf's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with ProShares Global and Invesco Dynamic

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

The idea behind ProShares Global Listed and Invesco Dynamic Building 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.