Correlation Between ZKB Gold and Invesco Treasury
Can any of the company-specific risk be diversified away by investing in both ZKB Gold and Invesco Treasury 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 ZKB Gold and Invesco Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZKB Gold ETF and Invesco Treasury Bond, you can compare the effects of market volatilities on ZKB Gold and Invesco Treasury 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 ZKB Gold with a short position of Invesco Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZKB Gold and Invesco Treasury.
Diversification Opportunities for ZKB Gold and Invesco Treasury
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ZKB and Invesco is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding ZKB Gold ETF and Invesco Treasury Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Treasury Bond and ZKB Gold 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 ZKB Gold ETF are associated (or correlated) with Invesco Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Treasury Bond has no effect on the direction of ZKB Gold i.e., ZKB Gold and Invesco Treasury go up and down completely randomly.
Pair Corralation between ZKB Gold and Invesco Treasury
Assuming the 90 days trading horizon ZKB Gold ETF is expected to generate 1.77 times more return on investment than Invesco Treasury. However, ZKB Gold is 1.77 times more volatile than Invesco Treasury Bond. It trades about 0.11 of its potential returns per unit of risk. Invesco Treasury Bond is currently generating about -0.14 per unit of risk. If you would invest 221,350 in ZKB Gold ETF on September 29, 2024 and sell it today you would earn a total of 13,850 from holding ZKB Gold ETF or generate 6.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ZKB Gold ETF vs. Invesco Treasury Bond
Performance |
Timeline |
ZKB Gold ETF |
Invesco Treasury Bond |
ZKB Gold and Invesco Treasury Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ZKB Gold and Invesco Treasury
The main advantage of trading using opposite ZKB Gold and Invesco Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZKB Gold position performs unexpectedly, Invesco Treasury 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 Treasury will offset losses from the drop in Invesco Treasury's long position.ZKB Gold vs. UBSFund Solutions MSCI | ZKB Gold vs. Vanguard SP 500 | ZKB Gold vs. iShares VII PLC | ZKB Gold vs. iShares Core SP |
Invesco Treasury vs. UBSFund Solutions MSCI | Invesco Treasury vs. Vanguard SP 500 | Invesco Treasury vs. iShares VII PLC | Invesco Treasury vs. iShares Core SP |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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