Correlation Between Invesco Dynamic and Global X
Can any of the company-specific risk be diversified away by investing in both Invesco Dynamic and Global X 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 Dynamic and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Dynamic Leisure and Global X Infrastructure, you can compare the effects of market volatilities on Invesco Dynamic and Global X 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 Dynamic with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Dynamic and Global X.
Diversification Opportunities for Invesco Dynamic and Global X
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and Global is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Dynamic Leisure and Global X Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Infrastructure and Invesco Dynamic 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 Dynamic Leisure are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Infrastructure has no effect on the direction of Invesco Dynamic i.e., Invesco Dynamic and Global X go up and down completely randomly.
Pair Corralation between Invesco Dynamic and Global X
Considering the 90-day investment horizon Invesco Dynamic is expected to generate 1.45 times less return on investment than Global X. But when comparing it to its historical volatility, Invesco Dynamic Leisure is 1.09 times less risky than Global X. It trades about 0.07 of its potential returns per unit of risk. Global X Infrastructure is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,691 in Global X Infrastructure on August 30, 2024 and sell it today you would earn a total of 1,868 from holding Global X Infrastructure or generate 69.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Dynamic Leisure vs. Global X Infrastructure
Performance |
| Timeline |
| Invesco Dynamic Leisure |
| Global X Infrastructure |
Invesco Dynamic and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Dynamic and Global X
The main advantage of trading using opposite Invesco Dynamic and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Dynamic position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Invesco Dynamic vs. Amplify ETF Trust | Invesco Dynamic vs. Invesco Dynamic Food | Invesco Dynamic vs. Invesco Dynamic Building |
| Global X vs. iShares Infrastructure ETF | Global X vs. Global X Cloud | Global X vs. Global X Cybersecurity | Global X vs. Invesco Dynamic Leisure |
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.
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