Correlation Between Invesco Physical and Bertrandt

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

By analyzing existing cross correlation between Invesco Physical Gold and Bertrandt AG, you can compare the effects of market volatilities on Invesco Physical and Bertrandt 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 Physical with a short position of Bertrandt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Physical and Bertrandt.

Diversification Opportunities for Invesco Physical and Bertrandt

0.86

Correlation Coefficient

Invesco Physical  Bertrandt

Very poor diversification

The 3 months correlation between Invesco and Bertrandt is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Physical Gold and Bertrandt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bertrandt AG and Invesco Physical 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 Physical Gold are associated (or correlated) with Bertrandt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bertrandt AG has no effect on the direction of Invesco Physical i.e., Invesco Physical and Bertrandt go up and down completely randomly.

Pair Corralation between Invesco Physical and Bertrandt

Assuming the 90 days trading horizon Invesco Physical Gold is expected to generate 0.81 times more return on investment than Bertrandt. However, Invesco Physical Gold is 1.23 times less risky than Bertrandt. It trades about 0.05 of its potential returns per unit of risk. Bertrandt AG is currently generating about -0.04 per unit of risk. If you would invest  18,411  in Invesco Physical Gold on December 2, 2024 and sell it today you would earn a total of  9,034  from holding Invesco Physical Gold or generate 49.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.6%
Values	Daily Returns

Invesco Physical Gold  vs.  Bertrandt AG

Invesco Physical Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Physical Gold are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Invesco Physical may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Bertrandt AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bertrandt AG are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Bertrandt unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Invesco Physical and Bertrandt

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

The idea behind Invesco Physical Gold and Bertrandt AG 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .