Correlation Between Invesco Galaxy and IShares JP

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Can any of the company-specific risk be diversified away by investing in both Invesco Galaxy and IShares JP 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 Invesco Galaxy and IShares JP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Galaxy Bitcoin and iShares JP Morgan, you can compare the effects of market volatilities on Invesco Galaxy and IShares JP 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 Invesco Galaxy with a short position of IShares JP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Galaxy and IShares JP.

Diversification Opportunities for Invesco Galaxy and IShares JP

InvescoISharesDiversified AwayInvescoISharesDiversified Away100%
0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between Invesco and IShares is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Galaxy Bitcoin and iShares JP Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares JP Morgan and Invesco Galaxy 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 Invesco Galaxy Bitcoin are associated (or correlated) with IShares JP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares JP Morgan has no effect on the direction of Invesco Galaxy i.e., Invesco Galaxy and IShares JP go up and down completely randomly.

Pair Corralation between Invesco Galaxy and IShares JP

Given the investment horizon of 90 days Invesco Galaxy Bitcoin is expected to generate 7.85 times more return on investment than IShares JP. However, Invesco Galaxy is 7.85 times more volatile than iShares JP Morgan. It trades about 0.09 of its potential returns per unit of risk. iShares JP Morgan is currently generating about 0.04 per unit of risk. If you would invest  4,653  in Invesco Galaxy Bitcoin on November 26, 2024 and sell it today you would earn a total of  4,729  from holding Invesco Galaxy Bitcoin or generate 101.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy56.77%
ValuesDaily Returns

Invesco Galaxy Bitcoin  vs.  iShares JP Morgan

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 05101520
JavaScript chart by amCharts 3.21.15BTCO LEMB
       Timeline  
Invesco Galaxy Bitcoin 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Galaxy Bitcoin are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Invesco Galaxy may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb9095100105
iShares JP Morgan 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in iShares JP Morgan are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, IShares JP is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb35.83636.236.436.636.83737.237.4

Invesco Galaxy and IShares JP Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.06-6.79-4.51-2.240.032.344.687.029.35 0.51.01.52.02.5
JavaScript chart by amCharts 3.21.15BTCO LEMB
       Returns  

Pair Trading with Invesco Galaxy and IShares JP

The main advantage of trading using opposite Invesco Galaxy and IShares JP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Galaxy position performs unexpectedly, IShares JP 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 IShares JP will offset losses from the drop in IShares JP's long position.
The idea behind Invesco Galaxy Bitcoin and iShares JP Morgan pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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