Correlation Between Global X and Invesco Preferred
Can any of the company-specific risk be diversified away by investing in both Global X and Invesco Preferred 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 Global X and Invesco Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X SuperDividend and Invesco Preferred ETF, you can compare the effects of market volatilities on Global X and Invesco Preferred 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 Global X with a short position of Invesco Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Invesco Preferred.
Diversification Opportunities for Global X and Invesco Preferred
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and Invesco is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Global X SuperDividend and Invesco Preferred ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Preferred ETF and Global X 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 Global X SuperDividend are associated (or correlated) with Invesco Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Preferred ETF has no effect on the direction of Global X i.e., Global X and Invesco Preferred go up and down completely randomly.
Pair Corralation between Global X and Invesco Preferred
Considering the 90-day investment horizon Global X SuperDividend is expected to generate 1.03 times more return on investment than Invesco Preferred. However, Global X is 1.03 times more volatile than Invesco Preferred ETF. It trades about 0.04 of its potential returns per unit of risk. Invesco Preferred ETF is currently generating about 0.04 per unit of risk. If you would invest 1,678 in Global X SuperDividend on August 28, 2024 and sell it today you would earn a total of 248.00 from holding Global X SuperDividend or generate 14.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X SuperDividend vs. Invesco Preferred ETF
Performance |
| Timeline |
| Global X SuperDividend |
| Invesco Preferred ETF |
Global X and Invesco Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Invesco Preferred
The main advantage of trading using opposite Global X and Invesco Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Invesco Preferred 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 Preferred will offset losses from the drop in Invesco Preferred's long position.| Global X vs. Global X SuperDividend | Global X vs. Invesco KBW High | Global X vs. Global X SuperDividend | Global X vs. WisdomTree High Dividend |
| Invesco Preferred vs. ETF Series Solutions | Invesco Preferred vs. Aquagold International | Invesco Preferred vs. Morningstar Unconstrained Allocation | Invesco Preferred vs. High Yield Municipal Fund |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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