Correlation Between MicroSectors FANG and Invesco India
Can any of the company-specific risk be diversified away by investing in both MicroSectors FANG and Invesco India 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 MicroSectors FANG and Invesco India into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MicroSectors FANG Index and Invesco India ETF, you can compare the effects of market volatilities on MicroSectors FANG and Invesco India 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 MicroSectors FANG with a short position of Invesco India. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroSectors FANG and Invesco India.
Diversification Opportunities for MicroSectors FANG and Invesco India
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MicroSectors and Invesco is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding MicroSectors FANG Index and Invesco India ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco India ETF and MicroSectors FANG 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 MicroSectors FANG Index are associated (or correlated) with Invesco India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco India ETF has no effect on the direction of MicroSectors FANG i.e., MicroSectors FANG and Invesco India go up and down completely randomly.
Pair Corralation between MicroSectors FANG and Invesco India
Given the investment horizon of 90 days MicroSectors FANG Index is expected to under-perform the Invesco India. In addition to that, MicroSectors FANG is 4.66 times more volatile than Invesco India ETF. It trades about -0.07 of its total potential returns per unit of risk. Invesco India ETF is currently generating about -0.25 per unit of volatility. If you would invest 2,607 in Invesco India ETF on October 22, 2024 and sell it today you would lose (110.00) from holding Invesco India ETF or give up 4.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MicroSectors FANG Index vs. Invesco India ETF
Performance |
| Timeline |
| MicroSectors FANG Index |
| Invesco India ETF |
MicroSectors FANG and Invesco India Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MicroSectors FANG and Invesco India
The main advantage of trading using opposite MicroSectors FANG and Invesco India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroSectors FANG position performs unexpectedly, Invesco India 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 India will offset losses from the drop in Invesco India's long position.| MicroSectors FANG vs. Direxion Daily Semiconductor | MicroSectors FANG vs. MicroSectors Solactive FANG | MicroSectors FANG vs. MicroSectors FANG Index | MicroSectors FANG vs. Direxion Daily Technology |
| Invesco India vs. WisdomTree India Earnings | Invesco India vs. iShares India 50 | Invesco India vs. iShares MSCI India | Invesco India vs. iShares MSCI Thailand |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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