Correlation Between Invesco CurrencyShares and ProShares
Can any of the company-specific risk be diversified away by investing in both Invesco CurrencyShares and ProShares 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 ProShares 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 ProShares SP 500, you can compare the effects of market volatilities on Invesco CurrencyShares and ProShares 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 ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco CurrencyShares and ProShares.
Diversification Opportunities for Invesco CurrencyShares and ProShares
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Invesco and ProShares is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Invesco CurrencyShares Japanes and ProShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP 500 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 ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP 500 has no effect on the direction of Invesco CurrencyShares i.e., Invesco CurrencyShares and ProShares go up and down completely randomly.
Pair Corralation between Invesco CurrencyShares and ProShares
Considering the 90-day investment horizon Invesco CurrencyShares Japanese is expected to under-perform the ProShares. But the etf apears to be less risky and, when comparing its historical volatility, Invesco CurrencyShares Japanese is 1.24 times less risky than ProShares. The etf trades about -0.05 of its potential returns per unit of risk. The ProShares SP 500 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,998 in ProShares SP 500 on August 28, 2024 and sell it today you would earn a total of 2,376 from holding ProShares SP 500 or generate 59.43% 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. ProShares SP 500
Performance |
| Timeline |
| Invesco CurrencyShares |
| ProShares SP 500 |
Invesco CurrencyShares and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco CurrencyShares and ProShares
The main advantage of trading using opposite Invesco CurrencyShares and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco CurrencyShares position performs unexpectedly, ProShares 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 ProShares will offset losses from the drop in ProShares' long position.The idea behind Invesco CurrencyShares Japanese and ProShares SP 500 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.
| ProShares vs. Morningstar Unconstrained Allocation | ProShares vs. High Yield Municipal Fund | ProShares vs. Via Renewables | ProShares vs. Knife River |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |