Correlation Between Northern Lights and Invesco Exchange
Can any of the company-specific risk be diversified away by investing in both Northern Lights and Invesco Exchange 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 Northern Lights and Invesco Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Lights and Invesco Exchange Traded, you can compare the effects of market volatilities on Northern Lights and Invesco Exchange 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 Northern Lights with a short position of Invesco Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Lights and Invesco Exchange.
Diversification Opportunities for Northern Lights and Invesco Exchange
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Northern and Invesco is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Northern Lights and Invesco Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Exchange Traded and Northern Lights 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 Northern Lights are associated (or correlated) with Invesco Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Exchange Traded has no effect on the direction of Northern Lights i.e., Northern Lights and Invesco Exchange go up and down completely randomly.
Pair Corralation between Northern Lights and Invesco Exchange
Given the investment horizon of 90 days Northern Lights is expected to generate 0.59 times more return on investment than Invesco Exchange. However, Northern Lights is 1.7 times less risky than Invesco Exchange. It trades about 0.11 of its potential returns per unit of risk. Invesco Exchange Traded is currently generating about 0.05 per unit of risk. If you would invest 2,368 in Northern Lights on September 14, 2024 and sell it today you would earn a total of 1,250 from holding Northern Lights or generate 52.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 36.64% |
| Values | Daily Returns |
Northern Lights vs. Invesco Exchange Traded
Performance |
| Timeline |
| Northern Lights |
| Invesco Exchange Traded |
Northern Lights and Invesco Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Lights and Invesco Exchange
The main advantage of trading using opposite Northern Lights and Invesco Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Lights position performs unexpectedly, Invesco Exchange 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 Exchange will offset losses from the drop in Invesco Exchange's long position.| Northern Lights vs. iShares Factors Growth | Northern Lights vs. Absolute Core Strategy | Northern Lights vs. iShares ESG Advanced | Northern Lights vs. PIMCO RAFI Dynamic |
| Invesco Exchange vs. FT Vest Equity | Invesco Exchange vs. Northern Lights | Invesco Exchange vs. Dimensional International High | Invesco Exchange vs. JPMorgan Fundamental Data |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |