Correlation Between Invesco Energy and Guinness Atkinson
Can any of the company-specific risk be diversified away by investing in both Invesco Energy and Guinness Atkinson 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 Energy and Guinness Atkinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Energy Fund and Guinness Atkinson Global, you can compare the effects of market volatilities on Invesco Energy and Guinness Atkinson 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 Energy with a short position of Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Energy and Guinness Atkinson.
Diversification Opportunities for Invesco Energy and Guinness Atkinson
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Guinness is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Energy Fund and Guinness Atkinson Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson Global and Invesco Energy 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 Energy Fund are associated (or correlated) with Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson Global has no effect on the direction of Invesco Energy i.e., Invesco Energy and Guinness Atkinson go up and down completely randomly.
Pair Corralation between Invesco Energy and Guinness Atkinson
Assuming the 90 days horizon Invesco Energy Fund is expected to generate 1.13 times more return on investment than Guinness Atkinson. However, Invesco Energy is 1.13 times more volatile than Guinness Atkinson Global. It trades about 0.24 of its potential returns per unit of risk. Guinness Atkinson Global is currently generating about 0.05 per unit of risk. If you would invest 3,006 in Invesco Energy Fund on August 29, 2024 and sell it today you would earn a total of 153.00 from holding Invesco Energy Fund or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Energy Fund vs. Guinness Atkinson Global
Performance |
| Timeline |
| Invesco Energy |
| Guinness Atkinson Global |
Invesco Energy and Guinness Atkinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Energy and Guinness Atkinson
The main advantage of trading using opposite Invesco Energy and Guinness Atkinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Energy position performs unexpectedly, Guinness Atkinson 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 Guinness Atkinson will offset losses from the drop in Guinness Atkinson's long position.| Invesco Energy vs. Guinness Atkinson Alternative | Invesco Energy vs. Firsthand Alternative Energy | Invesco Energy vs. Goldman Sachs Mlp | Invesco Energy vs. Dreyfus Natural Resources |
| Guinness Atkinson vs. HUMANA INC | Guinness Atkinson vs. Aquagold International | Guinness Atkinson vs. Barloworld Ltd ADR | Guinness Atkinson vs. Morningstar Unconstrained Allocation |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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