Correlation Between CYB and Invesco CurrencyShares
Can any of the company-specific risk be diversified away by investing in both CYB and Invesco CurrencyShares 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 CYB and Invesco CurrencyShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CYB and Invesco CurrencyShares Swiss, you can compare the effects of market volatilities on CYB and Invesco CurrencyShares 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 CYB with a short position of Invesco CurrencyShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of CYB and Invesco CurrencyShares.
Diversification Opportunities for CYB and Invesco CurrencyShares
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CYB and Invesco is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding CYB and Invesco CurrencyShares Swiss in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco CurrencyShares and CYB 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 CYB are associated (or correlated) with Invesco CurrencyShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco CurrencyShares has no effect on the direction of CYB i.e., CYB and Invesco CurrencyShares go up and down completely randomly.
Pair Corralation between CYB and Invesco CurrencyShares
Considering the 90-day investment horizon CYB is expected to under-perform the Invesco CurrencyShares. But the etf apears to be less risky and, when comparing its historical volatility, CYB is 1.16 times less risky than Invesco CurrencyShares. The etf trades about -0.03 of its potential returns per unit of risk. The Invesco CurrencyShares Swiss is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9,477 in Invesco CurrencyShares Swiss on August 27, 2024 and sell it today you would earn a total of 456.00 from holding Invesco CurrencyShares Swiss or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.85% |
| Values | Daily Returns |
CYB vs. Invesco CurrencyShares Swiss
Performance |
| Timeline |
| CYB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Invesco CurrencyShares |
CYB and Invesco CurrencyShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CYB and Invesco CurrencyShares
The main advantage of trading using opposite CYB and Invesco CurrencyShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CYB position performs unexpectedly, Invesco CurrencyShares 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 CurrencyShares will offset losses from the drop in Invesco CurrencyShares' long position.| CYB vs. Invesco CurrencyShares Australian | CYB vs. Invesco CurrencyShares Swiss | CYB vs. Invesco CurrencyShares Canadian | CYB vs. Invesco CurrencyShares Japanese |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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