Correlation Between Invesco CurrencyShares and ETRACS IFED
Can any of the company-specific risk be diversified away by investing in both Invesco CurrencyShares and ETRACS IFED 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 ETRACS IFED 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 ETRACS IFED Invest, you can compare the effects of market volatilities on Invesco CurrencyShares and ETRACS IFED 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 ETRACS IFED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco CurrencyShares and ETRACS IFED.
Diversification Opportunities for Invesco CurrencyShares and ETRACS IFED
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Invesco and ETRACS is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Invesco CurrencyShares Japanes and ETRACS IFED Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETRACS IFED Invest 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 ETRACS IFED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETRACS IFED Invest has no effect on the direction of Invesco CurrencyShares i.e., Invesco CurrencyShares and ETRACS IFED go up and down completely randomly.
Pair Corralation between Invesco CurrencyShares and ETRACS IFED
Considering the 90-day investment horizon Invesco CurrencyShares Japanese is expected to under-perform the ETRACS IFED. But the etf apears to be less risky and, when comparing its historical volatility, Invesco CurrencyShares Japanese is 1.63 times less risky than ETRACS IFED. The etf trades about -0.01 of its potential returns per unit of risk. The ETRACS IFED Invest is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,859 in ETRACS IFED Invest on August 26, 2024 and sell it today you would earn a total of 1,404 from holding ETRACS IFED Invest or generate 49.11% 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. ETRACS IFED Invest
Performance |
| Timeline |
| Invesco CurrencyShares |
| ETRACS IFED Invest |
Invesco CurrencyShares and ETRACS IFED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco CurrencyShares and ETRACS IFED
The main advantage of trading using opposite Invesco CurrencyShares and ETRACS IFED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco CurrencyShares position performs unexpectedly, ETRACS IFED 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 ETRACS IFED will offset losses from the drop in ETRACS IFED's long position.The idea behind Invesco CurrencyShares Japanese and ETRACS IFED Invest 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.
| ETRACS IFED vs. FT Vest Equity | ETRACS IFED vs. Northern Lights | ETRACS IFED vs. Dimensional International High | ETRACS IFED vs. First Trust Exchange Traded |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |