Correlation Between Invesco Exchange and IHIT
Can any of the company-specific risk be diversified away by investing in both Invesco Exchange and IHIT 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 Exchange and IHIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Exchange Traded and IHIT, you can compare the effects of market volatilities on Invesco Exchange and IHIT 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 Exchange with a short position of IHIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Exchange and IHIT.
Diversification Opportunities for Invesco Exchange and IHIT
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and IHIT is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Exchange Traded and IHIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHIT and Invesco Exchange 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 Exchange Traded are associated (or correlated) with IHIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHIT has no effect on the direction of Invesco Exchange i.e., Invesco Exchange and IHIT go up and down completely randomly.
Pair Corralation between Invesco Exchange and IHIT
Given the investment horizon of 90 days Invesco Exchange Traded is expected to generate 1.02 times more return on investment than IHIT. However, Invesco Exchange is 1.02 times more volatile than IHIT. It trades about 0.16 of its potential returns per unit of risk. IHIT is currently generating about -0.05 per unit of risk. If you would invest 2,470 in Invesco Exchange Traded on August 31, 2024 and sell it today you would earn a total of 820.00 from holding Invesco Exchange Traded or generate 33.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 12.45% |
| Values | Daily Returns |
Invesco Exchange Traded vs. IHIT
Performance |
| Timeline |
| Invesco Exchange Traded |
| IHIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Invesco Exchange and IHIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Exchange and IHIT
The main advantage of trading using opposite Invesco Exchange and IHIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Exchange position performs unexpectedly, IHIT 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 IHIT will offset losses from the drop in IHIT's long position.| Invesco Exchange vs. Franklin Templeton ETF | Invesco Exchange vs. Altrius Global Dividend | Invesco Exchange vs. Franklin International Core | Invesco Exchange vs. Madison ETFs Trust |
| IHIT vs. MFS Investment Grade | IHIT vs. Eaton Vance National | IHIT vs. Invesco High Income | IHIT vs. Nuveen California Select |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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