Correlation Between Invesco Physical and London Stock

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

By analyzing existing cross correlation between Invesco Physical Silver and London Stock Exchange, you can compare the effects of market volatilities on Invesco Physical and London Stock 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 London Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Physical and London Stock.

Diversification Opportunities for Invesco Physical and London Stock

-0.23

Correlation Coefficient

Invesco Physical  London Stock

Very good diversification

The 3 months correlation between Invesco and London is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Physical Silver and London Stock Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on London Stock Exchange 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 Silver are associated (or correlated) with London Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of London Stock Exchange has no effect on the direction of Invesco Physical i.e., Invesco Physical and London Stock go up and down completely randomly.

Pair Corralation between Invesco Physical and London Stock

Assuming the 90 days trading horizon Invesco Physical Silver is expected to generate 0.86 times more return on investment than London Stock. However, Invesco Physical Silver is 1.16 times less risky than London Stock. It trades about 0.15 of its potential returns per unit of risk. London Stock Exchange is currently generating about 0.0 per unit of risk. If you would invest  2,817  in Invesco Physical Silver on December 25, 2024 and sell it today you would earn a total of  335.00  from holding Invesco Physical Silver or generate 11.89% return on investment over 90 days.

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

Invesco Physical Silver  vs.  London Stock Exchange

Invesco Physical Silver

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Physical Silver are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Invesco Physical may actually be approaching a critical reversion point that can send shares even higher in April 2025.

London Stock Exchange

Risk-Adjusted Performance

Very Weak

Over the last 90 days London Stock Exchange has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, London Stock is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Invesco Physical and London Stock

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

The idea behind Invesco Physical Silver and London Stock Exchange 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.

Check out your portfolio center.

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 Stocks Directory module to find actively traded stocks across global markets.