Correlation Between Invesco Optimum and USCF ETF
Can any of the company-specific risk be diversified away by investing in both Invesco Optimum and USCF ETF 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 USCF ETF 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 USCF ETF Trust, you can compare the effects of market volatilities on Invesco Optimum and USCF ETF 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 USCF ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Optimum and USCF ETF.
Diversification Opportunities for Invesco Optimum and USCF ETF
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and USCF is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Optimum Yield and USCF ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF ETF Trust 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 USCF ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF ETF Trust has no effect on the direction of Invesco Optimum i.e., Invesco Optimum and USCF ETF go up and down completely randomly.
Pair Corralation between Invesco Optimum and USCF ETF
Given the investment horizon of 90 days Invesco Optimum Yield is expected to generate 1.04 times more return on investment than USCF ETF. However, Invesco Optimum is 1.04 times more volatile than USCF ETF Trust. It trades about 0.05 of its potential returns per unit of risk. USCF ETF Trust is currently generating about -0.11 per unit of risk. If you would invest 1,330 in Invesco Optimum Yield on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Invesco Optimum Yield or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Invesco Optimum Yield vs. USCF ETF Trust
Performance |
| Timeline |
| Invesco Optimum Yield |
| USCF ETF Trust |
Invesco Optimum and USCF ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Optimum and USCF ETF
The main advantage of trading using opposite Invesco Optimum and USCF ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Optimum position performs unexpectedly, USCF ETF 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 USCF ETF will offset losses from the drop in USCF ETF'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 |
| USCF ETF vs. Freedom Day Dividend | USCF ETF vs. Franklin Templeton ETF | USCF ETF vs. iShares MSCI China | USCF ETF vs. Tidal Trust II |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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