Correlation Between Invesco Global and Global X

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

Diversification Opportunities for Invesco Global and Global X

0.37

Correlation Coefficient

Invesco Global  Global X

Weak diversification

The 3 months correlation between Invesco and Global is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Global Listed and Global X Hydrogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Hydrogen and Invesco 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 Invesco Global Listed 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 Hydrogen has no effect on the direction of Invesco Global i.e., Invesco Global and Global X go up and down completely randomly.

Pair Corralation between Invesco Global and Global X

Considering the 90-day investment horizon Invesco Global Listed is expected to generate 0.43 times more return on investment than Global X. However, Invesco Global Listed is 2.34 times less risky than Global X. It trades about 0.08 of its potential returns per unit of risk. Global X Hydrogen is currently generating about -0.02 per unit of risk. If you would invest  5,482  in Invesco Global Listed on October 7, 2024 and sell it today you would earn a total of  1,266  from holding Invesco Global Listed or generate 23.09% return on investment over 90 days.

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

Invesco Global Listed  vs.  Global X Hydrogen

Invesco Global Listed

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Global Listed are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Invesco Global is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Global X Hydrogen

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Hydrogen are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Global X is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Invesco Global and Global X

The main advantage of trading using opposite Invesco Global and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Global 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 Global Listed and Global X Hydrogen 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.