Correlation Between Invesco BuyBack and Global X

Can any of the company-specific risk be diversified away by investing in both Invesco BuyBack 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 BuyBack 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 BuyBack Achievers and Global X Adaptive, you can compare the effects of market volatilities on Invesco BuyBack 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 BuyBack with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco BuyBack and Global X.

Diversification Opportunities for Invesco BuyBack and Global X

0.95

Correlation Coefficient

Invesco BuyBack  Global X

Almost no diversification

The 3 months correlation between Invesco and Global is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Invesco BuyBack Achievers and Global X Adaptive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Adaptive and Invesco BuyBack 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 BuyBack Achievers 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 Adaptive has no effect on the direction of Invesco BuyBack i.e., Invesco BuyBack and Global X go up and down completely randomly.

Pair Corralation between Invesco BuyBack and Global X

Considering the 90-day investment horizon Invesco BuyBack Achievers is expected to under-perform the Global X. In addition to that, Invesco BuyBack is 1.13 times more volatile than Global X Adaptive. It trades about -0.24 of its total potential returns per unit of risk. Global X Adaptive is currently generating about -0.23 per unit of volatility. If you would invest  4,373  in Global X Adaptive on October 8, 2024 and sell it today you would lose (152.00) from holding Global X Adaptive or give up 3.48% of portfolio value over 90 days.

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

Invesco BuyBack Achievers  vs.  Global X Adaptive

Invesco BuyBack Achievers

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco BuyBack Achievers are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable forward-looking signals, Invesco BuyBack is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Global X Adaptive

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Adaptive are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Global X is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Invesco BuyBack and Global X

The main advantage of trading using opposite Invesco BuyBack and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco BuyBack 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 BuyBack Achievers and Global X Adaptive 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.