Correlation Between Invesco CurrencyShares and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Invesco CurrencyShares and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs ETF, you can compare the effects of market volatilities on Invesco CurrencyShares and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco CurrencyShares and Goldman Sachs.
Diversification Opportunities for Invesco CurrencyShares and Goldman Sachs
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Goldman is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Invesco CurrencyShares Japanes and Goldman Sachs ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs ETF 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs ETF has no effect on the direction of Invesco CurrencyShares i.e., Invesco CurrencyShares and Goldman Sachs go up and down completely randomly.
Pair Corralation between Invesco CurrencyShares and Goldman Sachs
Considering the 90-day investment horizon Invesco CurrencyShares Japanese is expected to generate 1.95 times more return on investment than Goldman Sachs. However, Invesco CurrencyShares is 1.95 times more volatile than Goldman Sachs ETF. It trades about 0.09 of its potential returns per unit of risk. Goldman Sachs ETF is currently generating about 0.13 per unit of risk. If you would invest 6,079 in Invesco CurrencyShares Japanese on September 1, 2024 and sell it today you would earn a total of 91.00 from holding Invesco CurrencyShares Japanese or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Invesco CurrencyShares Japanes vs. Goldman Sachs ETF
Performance |
| Timeline |
| Invesco CurrencyShares |
| Goldman Sachs ETF |
Invesco CurrencyShares and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco CurrencyShares and Goldman Sachs
The main advantage of trading using opposite Invesco CurrencyShares and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco CurrencyShares position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Invesco CurrencyShares vs. Invesco CurrencyShares Canadian | Invesco CurrencyShares vs. Invesco CurrencyShares British |
| Goldman Sachs vs. iShares JP Morgan | Goldman Sachs vs. SPDR Bloomberg Barclays | Goldman Sachs vs. SPDR DoubleLine Emerging | Goldman Sachs vs. JPMorgan USD Emerging |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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