Correlation Between Invesco CurrencyShares and Virtus ETF
Can any of the company-specific risk be diversified away by investing in both Invesco CurrencyShares and Virtus ETF 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 Virtus ETF 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 Virtus ETF Trust, you can compare the effects of market volatilities on Invesco CurrencyShares and Virtus ETF 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 Virtus ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco CurrencyShares and Virtus ETF.
Diversification Opportunities for Invesco CurrencyShares and Virtus ETF
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Invesco and Virtus is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Invesco CurrencyShares Japanes and Virtus ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus ETF 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 Virtus ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus ETF Trust has no effect on the direction of Invesco CurrencyShares i.e., Invesco CurrencyShares and Virtus ETF go up and down completely randomly.
Pair Corralation between Invesco CurrencyShares and Virtus ETF
Considering the 90-day investment horizon Invesco CurrencyShares Japanese is expected to under-perform the Virtus ETF. In addition to that, Invesco CurrencyShares is 4.78 times more volatile than Virtus ETF Trust. It trades about -0.02 of its total potential returns per unit of risk. Virtus ETF Trust is currently generating about 0.17 per unit of volatility. If you would invest 2,436 in Virtus ETF Trust on November 9, 2024 and sell it today you would earn a total of 152.00 from holding Virtus ETF Trust or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco CurrencyShares Japanes vs. Virtus ETF Trust
Performance |
| Timeline |
| Invesco CurrencyShares |
| Virtus ETF Trust |
Invesco CurrencyShares and Virtus ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco CurrencyShares and Virtus ETF
The main advantage of trading using opposite Invesco CurrencyShares and Virtus ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco CurrencyShares position performs unexpectedly, Virtus ETF 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 Virtus ETF will offset losses from the drop in Virtus ETF's long position.The idea behind Invesco CurrencyShares Japanese and Virtus ETF 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.
| Virtus ETF vs. Valued Advisers Trust | Virtus ETF vs. Columbia Diversified Fixed | Virtus ETF vs. Principal Exchange Traded Funds | Virtus ETF vs. MFS Active Exchange |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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