Correlation Between Invesco CurrencyShares and Brendan Wood
Can any of the company-specific risk be diversified away by investing in both Invesco CurrencyShares and Brendan Wood 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 CurrencyShares and Brendan Wood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco CurrencyShares Japanese and Brendan Wood TopGun, you can compare the effects of market volatilities on Invesco CurrencyShares and Brendan Wood 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 CurrencyShares with a short position of Brendan Wood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco CurrencyShares and Brendan Wood.
Diversification Opportunities for Invesco CurrencyShares and Brendan Wood
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invesco and Brendan is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Invesco CurrencyShares Japanes and Brendan Wood TopGun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brendan Wood TopGun and Invesco CurrencyShares 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 CurrencyShares Japanese are associated (or correlated) with Brendan Wood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brendan Wood TopGun has no effect on the direction of Invesco CurrencyShares i.e., Invesco CurrencyShares and Brendan Wood go up and down completely randomly.
Pair Corralation between Invesco CurrencyShares and Brendan Wood
Considering the 90-day investment horizon Invesco CurrencyShares is expected to generate 3.55 times less return on investment than Brendan Wood. In addition to that, Invesco CurrencyShares is 1.33 times more volatile than Brendan Wood TopGun. It trades about 0.09 of its total potential returns per unit of risk. Brendan Wood TopGun is currently generating about 0.42 per unit of volatility. If you would invest 3,383 in Brendan Wood TopGun on September 1, 2024 and sell it today you would earn a total of 200.00 from holding Brendan Wood TopGun or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Invesco CurrencyShares Japanes vs. Brendan Wood TopGun
Performance |
| Timeline |
| Invesco CurrencyShares |
| Brendan Wood TopGun |
Invesco CurrencyShares and Brendan Wood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco CurrencyShares and Brendan Wood
The main advantage of trading using opposite Invesco CurrencyShares and Brendan Wood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco CurrencyShares position performs unexpectedly, Brendan Wood 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 Brendan Wood will offset losses from the drop in Brendan Wood's long position.| Invesco CurrencyShares vs. Invesco CurrencyShares Canadian | Invesco CurrencyShares vs. Invesco CurrencyShares British |
| Brendan Wood vs. Vanguard Total Stock | Brendan Wood vs. SPDR SP 500 | Brendan Wood vs. iShares Core SP | Brendan Wood vs. Vanguard Dividend Appreciation |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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