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 Wind, 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

0.02

Correlation Coefficient

Invesco Global  Global X

Significant diversification

The 3 months correlation between Invesco and Global is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Global Listed and Global X Wind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Wind 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 Wind 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 0.81 times more return on investment than Global X. However, Invesco Global Listed is 1.24 times less risky than Global X. It trades about 0.19 of its potential returns per unit of risk. Global X Wind is currently generating about -0.22 per unit of risk. If you would invest  6,626  in Invesco Global Listed on October 22, 2024 and sell it today you would earn a total of  244.00  from holding Invesco Global Listed or generate 3.68% return on investment over 90 days.

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

Invesco Global Listed  vs.  Global X Wind

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 Wind

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X Wind has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the ETF 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 Wind 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.