Correlation Between Invesco CurrencyShares and Series Portfolios
Can any of the company-specific risk be diversified away by investing in both Invesco CurrencyShares and Series Portfolios 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 Series Portfolios 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 Series Portfolios Trust, you can compare the effects of market volatilities on Invesco CurrencyShares and Series Portfolios 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 Series Portfolios. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco CurrencyShares and Series Portfolios.
Diversification Opportunities for Invesco CurrencyShares and Series Portfolios
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Invesco and Series is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Invesco CurrencyShares Japanes and Series Portfolios Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Series Portfolios Trust 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 Series Portfolios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Series Portfolios Trust has no effect on the direction of Invesco CurrencyShares i.e., Invesco CurrencyShares and Series Portfolios go up and down completely randomly.
Pair Corralation between Invesco CurrencyShares and Series Portfolios
Considering the 90-day investment horizon Invesco CurrencyShares Japanese is expected to generate 12.27 times more return on investment than Series Portfolios. However, Invesco CurrencyShares is 12.27 times more volatile than Series Portfolios Trust. It trades about 0.1 of its potential returns per unit of risk. Series Portfolios Trust is currently generating about 0.6 per unit of risk. If you would invest 6,070 in Invesco CurrencyShares Japanese on September 3, 2024 and sell it today you would earn a total of 100.00 from holding Invesco CurrencyShares Japanese or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco CurrencyShares Japanes vs. Series Portfolios Trust
Performance |
| Timeline |
| Invesco CurrencyShares |
| Series Portfolios Trust |
Invesco CurrencyShares and Series Portfolios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco CurrencyShares and Series Portfolios
The main advantage of trading using opposite Invesco CurrencyShares and Series Portfolios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco CurrencyShares position performs unexpectedly, Series Portfolios 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 Series Portfolios will offset losses from the drop in Series Portfolios' long position.The idea behind Invesco CurrencyShares Japanese and Series Portfolios Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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