Correlation Between Qs Global and Invesco Energy

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Can any of the company-specific risk be diversified away by investing in both Qs Global and Invesco Energy 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 Qs Global and Invesco Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qs Global Equity and Invesco Energy Fund, you can compare the effects of market volatilities on Qs Global and Invesco Energy 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 Qs Global with a short position of Invesco Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qs Global and Invesco Energy.

Diversification Opportunities for Qs Global and Invesco Energy

SMYIXInvescoDiversified AwaySMYIXInvescoDiversified Away100%
0.54
  Correlation Coefficient

Very weak diversification

The 3 months correlation between SMYIX and Invesco is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Qs Global Equity and Invesco Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Energy and Qs 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 Qs Global Equity are associated (or correlated) with Invesco Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Energy has no effect on the direction of Qs Global i.e., Qs Global and Invesco Energy go up and down completely randomly.

Pair Corralation between Qs Global and Invesco Energy

Assuming the 90 days horizon Qs Global is expected to generate 1.2 times less return on investment than Invesco Energy. But when comparing it to its historical volatility, Qs Global Equity is 1.06 times less risky than Invesco Energy. It trades about 0.06 of its potential returns per unit of risk. Invesco Energy Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,389  in Invesco Energy Fund on October 28, 2024 and sell it today you would earn a total of  89.00  from holding Invesco Energy Fund or generate 3.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Qs Global Equity  vs.  Invesco Energy Fund

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -6-4-202468
JavaScript chart by amCharts 3.21.15SMYIX IEFCX
       Timeline  
Qs Global Equity 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Qs Global Equity are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Qs Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan24.52525.526
Invesco Energy 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Energy Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Invesco Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan2323.52424.52525.5

Qs Global and Invesco Energy Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.87-2.15-1.43-0.710.01230.731.472.212.95 0.10.20.30.4
JavaScript chart by amCharts 3.21.15SMYIX IEFCX
       Returns  

Pair Trading with Qs Global and Invesco Energy

The main advantage of trading using opposite Qs Global and Invesco Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qs Global position performs unexpectedly, Invesco Energy 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 Energy will offset losses from the drop in Invesco Energy's long position.
The idea behind Qs Global Equity and Invesco Energy Fund 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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