Correlation Between Invesco Energy and Polen Smid

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Can any of the company-specific risk be diversified away by investing in both Invesco Energy and Polen Smid 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 Energy and Polen Smid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Energy Fund and Polen Smid, you can compare the effects of market volatilities on Invesco Energy and Polen Smid 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 Energy with a short position of Polen Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Energy and Polen Smid.

Diversification Opportunities for Invesco Energy and Polen Smid

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Invesco and Polen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Energy Fund and Polen Smid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Smid and Invesco Energy 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 Energy Fund are associated (or correlated) with Polen Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen Smid has no effect on the direction of Invesco Energy i.e., Invesco Energy and Polen Smid go up and down completely randomly.

Pair Corralation between Invesco Energy and Polen Smid

If you would invest (100.00) in Polen Smid on September 12, 2024 and sell it today you would earn a total of  100.00  from holding Polen Smid or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Invesco Energy Fund  vs.  Polen Smid

 Performance 
       Timeline  
Invesco Energy 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Energy Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Invesco Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Polen Smid 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Solid
Over the last 90 days Polen Smid has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Polen Smid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Invesco Energy and Polen Smid Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Invesco Energy and Polen Smid

The main advantage of trading using opposite Invesco Energy and Polen Smid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Energy position performs unexpectedly, Polen Smid 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 Polen Smid will offset losses from the drop in Polen Smid's long position.
The idea behind Invesco Energy Fund and Polen Smid 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.
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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