Correlation Between Xtrackers Harvest and Invesco China
Can any of the company-specific risk be diversified away by investing in both Xtrackers Harvest and Invesco China 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 Xtrackers Harvest and Invesco China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Harvest CSI and Invesco China Technology, you can compare the effects of market volatilities on Xtrackers Harvest and Invesco China 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 Xtrackers Harvest with a short position of Invesco China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Harvest and Invesco China.
Diversification Opportunities for Xtrackers Harvest and Invesco China
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xtrackers and Invesco is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Harvest CSI and Invesco China Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco China Technology and Xtrackers Harvest 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 Xtrackers Harvest CSI are associated (or correlated) with Invesco China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco China Technology has no effect on the direction of Xtrackers Harvest i.e., Xtrackers Harvest and Invesco China go up and down completely randomly.
Pair Corralation between Xtrackers Harvest and Invesco China
Given the investment horizon of 90 days Xtrackers Harvest CSI is expected to generate 0.89 times more return on investment than Invesco China. However, Xtrackers Harvest CSI is 1.13 times less risky than Invesco China. It trades about -0.1 of its potential returns per unit of risk. Invesco China Technology is currently generating about -0.09 per unit of risk. If you would invest 2,796 in Xtrackers Harvest CSI on August 27, 2024 and sell it today you would lose (146.00) from holding Xtrackers Harvest CSI or give up 5.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Harvest CSI vs. Invesco China Technology
Performance |
| Timeline |
| Xtrackers Harvest CSI |
| Invesco China Technology |
Xtrackers Harvest and Invesco China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Harvest and Invesco China
The main advantage of trading using opposite Xtrackers Harvest and Invesco China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Harvest position performs unexpectedly, Invesco China 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 China will offset losses from the drop in Invesco China's long position.| Xtrackers Harvest vs. iShares MSCI China | Xtrackers Harvest vs. Xtrackers Harvest CSI | Xtrackers Harvest vs. Direxion Daily CSI | Xtrackers Harvest vs. KraneShares CSI China |
| Invesco China vs. KraneShares CSI China | Invesco China vs. iShares MSCI China | Invesco China vs. Global X MSCI | Invesco China vs. Xtrackers Harvest CSI |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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