Correlation Between Siit Equity and Invesco Core

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

By analyzing existing cross correlation between Siit Equity Factor and Invesco E Plus, you can compare the effects of market volatilities on Siit Equity and Invesco Core 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 Siit Equity with a short position of Invesco Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Equity and Invesco Core.

Diversification Opportunities for Siit Equity and Invesco Core

-0.15

Correlation Coefficient

Siit Equity  Invesco Core

Good diversification

The 3 months correlation between Siit and Invesco is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Siit Equity Factor and Invesco E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco E Plus and Siit Equity 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 Siit Equity Factor are associated (or correlated) with Invesco Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco E Plus has no effect on the direction of Siit Equity i.e., Siit Equity and Invesco Core go up and down completely randomly.

Pair Corralation between Siit Equity and Invesco Core

Assuming the 90 days horizon Siit Equity Factor is expected to under-perform the Invesco Core. In addition to that, Siit Equity is 3.28 times more volatile than Invesco E Plus. It trades about -0.05 of its total potential returns per unit of risk. Invesco E Plus is currently generating about 0.14 per unit of volatility. If you would invest  902.00  in Invesco E Plus on December 20, 2024 and sell it today you would earn a total of  20.00  from holding Invesco E Plus or generate 2.22% return on investment over 90 days.

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

Siit Equity Factor  vs.  Invesco E Plus

Siit Equity Factor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Siit Equity Factor has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Siit Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Invesco E Plus

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco E Plus are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Invesco Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Siit Equity and Invesco Core

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

The idea behind Siit Equity Factor and Invesco E Plus 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 Commodity Directory module to find actively traded commodities issued by global exchanges.