Correlation Between Leverage Shares and Invesco Markets
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and Invesco Markets 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 Leverage Shares and Invesco Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 2x and Invesco Markets II, you can compare the effects of market volatilities on Leverage Shares and Invesco Markets 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 Leverage Shares with a short position of Invesco Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and Invesco Markets.
Diversification Opportunities for Leverage Shares and Invesco Markets
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Leverage and Invesco is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 2x and Invesco Markets II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Markets II and Leverage Shares 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 Leverage Shares 2x are associated (or correlated) with Invesco Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Markets II has no effect on the direction of Leverage Shares i.e., Leverage Shares and Invesco Markets go up and down completely randomly.
Pair Corralation between Leverage Shares and Invesco Markets
Assuming the 90 days trading horizon Leverage Shares 2x is expected to generate 2.63 times more return on investment than Invesco Markets. However, Leverage Shares is 2.63 times more volatile than Invesco Markets II. It trades about 0.13 of its potential returns per unit of risk. Invesco Markets II is currently generating about 0.06 per unit of risk. If you would invest 246.00 in Leverage Shares 2x on October 28, 2024 and sell it today you would earn a total of 5,814 from holding Leverage Shares 2x or generate 2363.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leverage Shares 2x vs. Invesco Markets II
Performance |
| Timeline |
| Leverage Shares 2x |
| Invesco Markets II |
Leverage Shares and Invesco Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and Invesco Markets
The main advantage of trading using opposite Leverage Shares and Invesco Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, Invesco Markets 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 Markets will offset losses from the drop in Invesco Markets' long position.| Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x |
| Invesco Markets vs. Vanguard FTSE Developed | Invesco Markets vs. Leverage Shares 2x | Invesco Markets vs. Amundi Index Solutions | Invesco Markets vs. Amundi Index Solutions |
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 Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |