Correlation Between EGSHARES BLUE and Invesco Multi
Can any of the company-specific risk be diversified away by investing in both EGSHARES BLUE and Invesco Multi 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 EGSHARES BLUE and Invesco Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EGSHARES BLUE CHIP and Invesco Multi Strategy Alternative, you can compare the effects of market volatilities on EGSHARES BLUE and Invesco Multi 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 EGSHARES BLUE with a short position of Invesco Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of EGSHARES BLUE and Invesco Multi.
Diversification Opportunities for EGSHARES BLUE and Invesco Multi
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EGSHARES and Invesco is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding EGSHARES BLUE CHIP and Invesco Multi Strategy Alterna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Multi Strategy and EGSHARES BLUE 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 EGSHARES BLUE CHIP are associated (or correlated) with Invesco Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Multi Strategy has no effect on the direction of EGSHARES BLUE i.e., EGSHARES BLUE and Invesco Multi go up and down completely randomly.
Pair Corralation between EGSHARES BLUE and Invesco Multi
Given the investment horizon of 90 days EGSHARES BLUE CHIP is expected to generate 2.79 times more return on investment than Invesco Multi. However, EGSHARES BLUE is 2.79 times more volatile than Invesco Multi Strategy Alternative. It trades about 0.24 of its potential returns per unit of risk. Invesco Multi Strategy Alternative is currently generating about 0.24 per unit of risk. If you would invest 3,297 in EGSHARES BLUE CHIP on September 2, 2024 and sell it today you would earn a total of 166.00 from holding EGSHARES BLUE CHIP or generate 5.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EGSHARES BLUE CHIP vs. Invesco Multi Strategy Alterna
Performance |
| Timeline |
| EGSHARES BLUE CHIP |
| Invesco Multi Strategy |
EGSHARES BLUE and Invesco Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EGSHARES BLUE and Invesco Multi
The main advantage of trading using opposite EGSHARES BLUE and Invesco Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EGSHARES BLUE position performs unexpectedly, Invesco Multi 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 Multi will offset losses from the drop in Invesco Multi's long position.| EGSHARES BLUE vs. FT Vest Equity | EGSHARES BLUE vs. Northern Lights | EGSHARES BLUE vs. Dimensional International High | EGSHARES BLUE vs. Matthews China Discovery |
| Invesco Multi vs. SPDR SSgA Global | Invesco Multi vs. SPDR SSgA Income | Invesco Multi vs. VanEck Inflation Allocation | Invesco Multi vs. SPDR MSCI EAFE |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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