Correlation Between Global X and Invesco WilderHill
Can any of the company-specific risk be diversified away by investing in both Global X and Invesco WilderHill 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 Global X and Invesco WilderHill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Thematic and Invesco WilderHill Clean, you can compare the effects of market volatilities on Global X and Invesco WilderHill 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 Global X with a short position of Invesco WilderHill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Invesco WilderHill.
Diversification Opportunities for Global X and Invesco WilderHill
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and Invesco is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Global X Thematic and Invesco WilderHill Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco WilderHill Clean and Global X 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 Global X Thematic are associated (or correlated) with Invesco WilderHill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco WilderHill Clean has no effect on the direction of Global X i.e., Global X and Invesco WilderHill go up and down completely randomly.
Pair Corralation between Global X and Invesco WilderHill
Given the investment horizon of 90 days Global X Thematic is expected to generate 0.55 times more return on investment than Invesco WilderHill. However, Global X Thematic is 1.81 times less risky than Invesco WilderHill. It trades about 0.03 of its potential returns per unit of risk. Invesco WilderHill Clean is currently generating about -0.03 per unit of risk. If you would invest 2,317 in Global X Thematic on August 27, 2024 and sell it today you would earn a total of 169.00 from holding Global X Thematic or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Thematic vs. Invesco WilderHill Clean
Performance |
| Timeline |
| Global X Thematic |
| Invesco WilderHill Clean |
Global X and Invesco WilderHill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Invesco WilderHill
The main advantage of trading using opposite Global X and Invesco WilderHill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Invesco WilderHill 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 Invesco WilderHill will offset losses from the drop in Invesco WilderHill's long position.| Global X vs. Main Sector Rotation | Global X vs. Franklin Exponential Data | Global X vs. Goldman Sachs Innovate |
| Invesco WilderHill vs. Invesco DWA Momentum | Invesco WilderHill vs. Invesco DWA Developed | Invesco WilderHill vs. Invesco DWA Emerging | Invesco WilderHill vs. First Trust Small |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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