Correlation Between Exela Technologies and Invesco Technology

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

By analyzing existing cross correlation between Exela Technologies Preferred and Invesco Technology Fund, you can compare the effects of market volatilities on Exela Technologies and Invesco Technology 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 Exela Technologies with a short position of Invesco Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exela Technologies and Invesco Technology.

Diversification Opportunities for Exela Technologies and Invesco Technology

-0.63

Correlation Coefficient

Exela Technologies  Invesco Technology

Excellent diversification

The 3 months correlation between Exela and Invesco is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Exela Technologies Preferred and Invesco Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Technology and Exela Technologies 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 Exela Technologies Preferred are associated (or correlated) with Invesco Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Technology has no effect on the direction of Exela Technologies i.e., Exela Technologies and Invesco Technology go up and down completely randomly.

Pair Corralation between Exela Technologies and Invesco Technology

Assuming the 90 days horizon Exela Technologies Preferred is expected to under-perform the Invesco Technology. In addition to that, Exela Technologies is 4.83 times more volatile than Invesco Technology Fund. It trades about -0.17 of its total potential returns per unit of risk. Invesco Technology Fund is currently generating about 0.24 per unit of volatility. If you would invest  5,810  in Invesco Technology Fund on August 31, 2024 and sell it today you would earn a total of  1,167  from holding Invesco Technology Fund or generate 20.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	82.54%
Values	Daily Returns

Exela Technologies Preferred  vs.  Invesco Technology Fund

Exela Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exela Technologies Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Preferred Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Invesco Technology

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Technology Fund are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Invesco Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exela Technologies and Invesco Technology

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

The idea behind Exela Technologies Preferred and Invesco Technology 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.