Correlation Between Invesco Global and Exchange Traded

Can any of the company-specific risk be diversified away by investing in both Invesco Global and Exchange Traded 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 Exchange Traded 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 Exchange Traded Concepts, you can compare the effects of market volatilities on Invesco Global and Exchange Traded 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 Exchange Traded. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Global and Exchange Traded.

Diversification Opportunities for Invesco Global and Exchange Traded

0.87

Correlation Coefficient

Invesco Global  Exchange Traded

Very poor diversification

The 3 months correlation between Invesco and Exchange is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Global Listed and Exchange Traded Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Traded Concepts 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 Exchange Traded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Traded Concepts has no effect on the direction of Invesco Global i.e., Invesco Global and Exchange Traded go up and down completely randomly.

Pair Corralation between Invesco Global and Exchange Traded

Considering the 90-day investment horizon Invesco Global Listed is expected to under-perform the Exchange Traded. But the etf apears to be less risky and, when comparing its historical volatility, Invesco Global Listed is 2.57 times less risky than Exchange Traded. The etf trades about -0.02 of its potential returns per unit of risk. The Exchange Traded Concepts is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  4,272  in Exchange Traded Concepts on December 26, 2024 and sell it today you would lose (68.00) from holding Exchange Traded Concepts or give up 1.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

Invesco Global Listed  vs.  Exchange Traded Concepts

Invesco Global Listed

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco Global Listed has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Exchange Traded Concepts

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Invesco Global and Exchange Traded

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

The idea behind Invesco Global Listed and Exchange Traded Concepts 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.