Correlation Between Leverage Shares and Invesco AT1
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and Invesco AT1 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 Leverage Shares and Invesco AT1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 3x and Invesco AT1 Capital, you can compare the effects of market volatilities on Leverage Shares and Invesco AT1 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 Leverage Shares with a short position of Invesco AT1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and Invesco AT1.
Diversification Opportunities for Leverage Shares and Invesco AT1
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Leverage and Invesco is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 3x and Invesco AT1 Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco AT1 Capital and Leverage Shares 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 Leverage Shares 3x are associated (or correlated) with Invesco AT1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco AT1 Capital has no effect on the direction of Leverage Shares i.e., Leverage Shares and Invesco AT1 go up and down completely randomly.
Pair Corralation between Leverage Shares and Invesco AT1
Assuming the 90 days trading horizon Leverage Shares 3x is expected to under-perform the Invesco AT1. In addition to that, Leverage Shares is 35.96 times more volatile than Invesco AT1 Capital. It trades about -0.01 of its total potential returns per unit of risk. Invesco AT1 Capital is currently generating about -0.04 per unit of volatility. If you would invest 2,683 in Invesco AT1 Capital on September 12, 2024 and sell it today you would lose (9.00) from holding Invesco AT1 Capital or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leverage Shares 3x vs. Invesco AT1 Capital
Performance |
| Timeline |
| Leverage Shares 3x |
| Invesco AT1 Capital |
Leverage Shares and Invesco AT1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and Invesco AT1
The main advantage of trading using opposite Leverage Shares and Invesco AT1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, Invesco AT1 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 AT1 will offset losses from the drop in Invesco AT1's long position.| Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x |
| Invesco AT1 vs. Invesco MSCI Emerging | Invesco AT1 vs. Invesco EURO STOXX | Invesco AT1 vs. Invesco Markets Plc | Invesco AT1 vs. Invesco FTSE RAFI |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |