Correlation Between Invesco China and ProShares Online
Can any of the company-specific risk be diversified away by investing in both Invesco China and ProShares Online 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 China and ProShares Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco China Technology and ProShares Online Retail, you can compare the effects of market volatilities on Invesco China and ProShares Online 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 China with a short position of ProShares Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco China and ProShares Online.
Diversification Opportunities for Invesco China and ProShares Online
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and ProShares is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Invesco China Technology and ProShares Online Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Online Retail and Invesco China 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 China Technology are associated (or correlated) with ProShares Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Online Retail has no effect on the direction of Invesco China i.e., Invesco China and ProShares Online go up and down completely randomly.
Pair Corralation between Invesco China and ProShares Online
Given the investment horizon of 90 days Invesco China Technology is expected to under-perform the ProShares Online. In addition to that, Invesco China is 2.23 times more volatile than ProShares Online Retail. It trades about -0.04 of its total potential returns per unit of risk. ProShares Online Retail is currently generating about 0.17 per unit of volatility. If you would invest 4,411 in ProShares Online Retail on August 29, 2024 and sell it today you would earn a total of 207.00 from holding ProShares Online Retail or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco China Technology vs. ProShares Online Retail
Performance |
| Timeline |
| Invesco China Technology |
| ProShares Online Retail |
Invesco China and ProShares Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco China and ProShares Online
The main advantage of trading using opposite Invesco China and ProShares Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco China position performs unexpectedly, ProShares Online 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 ProShares Online will offset losses from the drop in ProShares Online's long position.| Invesco China vs. KraneShares CSI China | Invesco China vs. iShares MSCI China | Invesco China vs. Global X MSCI | Invesco China vs. Xtrackers Harvest CSI |
| ProShares Online vs. Amplify Online Retail | ProShares Online vs. ProShares Long OnlineShort | ProShares Online vs. Global X E commerce | ProShares Online vs. WisdomTree Cloud Computing |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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