Correlation Between Invesco Optimum and United States
Can any of the company-specific risk be diversified away by investing in both Invesco Optimum and United States 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 United States 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 United States Commodity, you can compare the effects of market volatilities on Invesco Optimum and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Optimum and United States.
Diversification Opportunities for Invesco Optimum and United States
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and United is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Optimum Yield and United States Commodity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Commodity 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Commodity has no effect on the direction of Invesco Optimum i.e., Invesco Optimum and United States go up and down completely randomly.
Pair Corralation between Invesco Optimum and United States
Given the investment horizon of 90 days Invesco Optimum Yield is expected to under-perform the United States. In addition to that, Invesco Optimum is 1.08 times more volatile than United States Commodity. It trades about -0.02 of its total potential returns per unit of risk. United States Commodity is currently generating about 0.04 per unit of volatility. If you would invest 5,958 in United States Commodity on September 1, 2024 and sell it today you would earn a total of 538.00 from holding United States Commodity or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Optimum Yield vs. United States Commodity
Performance |
| Timeline |
| Invesco Optimum Yield |
| United States Commodity |
Invesco Optimum and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Optimum and United States
The main advantage of trading using opposite Invesco Optimum and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Optimum position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' 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 |
| United States vs. KraneShares Bosera MSCI | United States vs. WisdomTree Continuous Commodity | United States vs. iPath Bloomberg Commodity | United States vs. Cambria Shareholder Yield |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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