Correlation Between Barclays ETN and Invesco Solar
Can any of the company-specific risk be diversified away by investing in both Barclays ETN and Invesco Solar 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 Barclays ETN and Invesco Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays ETN Select and Invesco Solar ETF, you can compare the effects of market volatilities on Barclays ETN and Invesco Solar 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 Barclays ETN with a short position of Invesco Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and Invesco Solar.
Diversification Opportunities for Barclays ETN and Invesco Solar
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barclays and Invesco is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and Invesco Solar ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Solar ETF and Barclays ETN 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 Barclays ETN Select are associated (or correlated) with Invesco Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Solar ETF has no effect on the direction of Barclays ETN i.e., Barclays ETN and Invesco Solar go up and down completely randomly.
Pair Corralation between Barclays ETN and Invesco Solar
Given the investment horizon of 90 days Barclays ETN Select is expected to generate 0.74 times more return on investment than Invesco Solar. However, Barclays ETN Select is 1.35 times less risky than Invesco Solar. It trades about 0.16 of its potential returns per unit of risk. Invesco Solar ETF is currently generating about -0.06 per unit of risk. If you would invest 2,879 in Barclays ETN Select on November 3, 2024 and sell it today you would earn a total of 140.00 from holding Barclays ETN Select or generate 4.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays ETN Select vs. Invesco Solar ETF
Performance |
| Timeline |
| Barclays ETN Select |
| Invesco Solar ETF |
Barclays ETN and Invesco Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and Invesco Solar
The main advantage of trading using opposite Barclays ETN and Invesco Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN position performs unexpectedly, Invesco Solar 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 Solar will offset losses from the drop in Invesco Solar's long position.| Barclays ETN vs. Alerian Energy Infrastructure | Barclays ETN vs. UBS AG London | Barclays ETN vs. First Trust North | Barclays ETN vs. Tortoise North American |
| Invesco Solar vs. iShares Global Clean | Invesco Solar vs. Invesco WilderHill Clean | Invesco Solar vs. First Trust NASDAQ | Invesco Solar vs. Global X Lithium |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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