Correlation Between Invesco Optimum and IShares Commodity
Can any of the company-specific risk be diversified away by investing in both Invesco Optimum and IShares Commodity 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 Optimum and IShares Commodity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Optimum Yield and iShares Commodity Curve, you can compare the effects of market volatilities on Invesco Optimum and IShares Commodity 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 Optimum with a short position of IShares Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Optimum and IShares Commodity.
Diversification Opportunities for Invesco Optimum and IShares Commodity
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and IShares is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Optimum Yield and iShares Commodity Curve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Commodity Curve and Invesco Optimum 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 Optimum Yield are associated (or correlated) with IShares Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Commodity Curve has no effect on the direction of Invesco Optimum i.e., Invesco Optimum and IShares Commodity go up and down completely randomly.
Pair Corralation between Invesco Optimum and IShares Commodity
Given the investment horizon of 90 days Invesco Optimum is expected to generate 10.34 times less return on investment than IShares Commodity. In addition to that, Invesco Optimum is 1.07 times more volatile than iShares Commodity Curve. It trades about 0.01 of its total potential returns per unit of risk. iShares Commodity Curve is currently generating about 0.09 per unit of volatility. If you would invest 2,063 in iShares Commodity Curve on August 27, 2024 and sell it today you would earn a total of 34.00 from holding iShares Commodity Curve or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Optimum Yield vs. iShares Commodity Curve
Performance |
| Timeline |
| Invesco Optimum Yield |
| iShares Commodity Curve |
Invesco Optimum and IShares Commodity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Optimum and IShares Commodity
The main advantage of trading using opposite Invesco Optimum and IShares Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Optimum position performs unexpectedly, IShares Commodity 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 IShares Commodity will offset losses from the drop in IShares Commodity's long position.| Invesco Optimum vs. iShares GSCI Commodity | Invesco Optimum vs. First Trust Global | Invesco Optimum vs. iShares SP GSCI | Invesco Optimum vs. Invesco DB Commodity |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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