Correlation Between Invesco Physical and Weir Group

Can any of the company-specific risk be diversified away by investing in both Invesco Physical and Weir Group 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 Weir Group 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 Weir Group PLC, you can compare the effects of market volatilities on Invesco Physical and Weir Group 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 Weir Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Physical and Weir Group.

Diversification Opportunities for Invesco Physical and Weir Group

-0.44

Correlation Coefficient

Invesco Physical  Weir Group

Very good diversification

The 3 months correlation between Invesco and Weir is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Physical Silver and Weir Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weir Group PLC 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 Weir Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weir Group PLC has no effect on the direction of Invesco Physical i.e., Invesco Physical and Weir Group go up and down completely randomly.

Pair Corralation between Invesco Physical and Weir Group

Assuming the 90 days trading horizon Invesco Physical Silver is expected to under-perform the Weir Group. In addition to that, Invesco Physical is 2.41 times more volatile than Weir Group PLC. It trades about -0.18 of its total potential returns per unit of risk. Weir Group PLC is currently generating about -0.3 per unit of volatility. If you would invest  229,600  in Weir Group PLC on October 10, 2024 and sell it today you would lose (9,400) from holding Weir Group PLC or give up 4.09% of portfolio value over 90 days.

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

Invesco Physical Silver  vs.  Weir Group PLC

Invesco Physical Silver

Risk-Adjusted Performance

0 of 100

Very Weak

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

Weir Group PLC

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Weir Group PLC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Weir Group 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 Weir Group

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

The idea behind Invesco Physical Silver and Weir Group PLC 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.