Correlation Between ETF Series and Invesco Financial
Can any of the company-specific risk be diversified away by investing in both ETF Series and Invesco Financial 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 ETF Series and Invesco Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETF Series Solutions and Invesco Financial Preferred, you can compare the effects of market volatilities on ETF Series and Invesco Financial 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 ETF Series with a short position of Invesco Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETF Series and Invesco Financial.
Diversification Opportunities for ETF Series and Invesco Financial
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between ETF and Invesco is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding ETF Series Solutions and Invesco Financial Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Financial and ETF Series 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 ETF Series Solutions are associated (or correlated) with Invesco Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Financial has no effect on the direction of ETF Series i.e., ETF Series and Invesco Financial go up and down completely randomly.
Pair Corralation between ETF Series and Invesco Financial
Given the investment horizon of 90 days ETF Series Solutions is expected to generate 1.68 times more return on investment than Invesco Financial. However, ETF Series is 1.68 times more volatile than Invesco Financial Preferred. It trades about 0.08 of its potential returns per unit of risk. Invesco Financial Preferred is currently generating about -0.01 per unit of risk. If you would invest 3,217 in ETF Series Solutions on August 29, 2024 and sell it today you would earn a total of 157.00 from holding ETF Series Solutions or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ETF Series Solutions vs. Invesco Financial Preferred
Performance |
| Timeline |
| ETF Series Solutions |
| Invesco Financial |
ETF Series and Invesco Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETF Series and Invesco Financial
The main advantage of trading using opposite ETF Series and Invesco Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETF Series position performs unexpectedly, Invesco Financial 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 Financial will offset losses from the drop in Invesco Financial's long position.| ETF Series vs. Freedom Day Dividend | ETF Series vs. Franklin Templeton ETF | ETF Series vs. iShares MSCI China | ETF Series vs. Tidal Trust II |
| Invesco Financial vs. Invesco Preferred ETF | Invesco Financial vs. iShares Preferred and | Invesco Financial vs. SPDR ICE Preferred | Invesco Financial vs. VanEck Preferred Securities |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |