Correlation Between Invesco High and Global X
Can any of the company-specific risk be diversified away by investing in both Invesco High 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 High 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 High Yield and Global X Adaptive, you can compare the effects of market volatilities on Invesco High 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 High with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and Global X.
Diversification Opportunities for Invesco High and Global X
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and Global is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Yield and Global X Adaptive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Adaptive and Invesco High 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 High Yield 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 Adaptive has no effect on the direction of Invesco High i.e., Invesco High and Global X go up and down completely randomly.
Pair Corralation between Invesco High and Global X
Considering the 90-day investment horizon Invesco High is expected to generate 1.98 times less return on investment than Global X. In addition to that, Invesco High is 1.3 times more volatile than Global X Adaptive. It trades about 0.04 of its total potential returns per unit of risk. Global X Adaptive is currently generating about 0.11 per unit of volatility. If you would invest 2,989 in Global X Adaptive on August 30, 2024 and sell it today you would earn a total of 1,520 from holding Global X Adaptive or generate 50.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco High Yield vs. Global X Adaptive
Performance |
| Timeline |
| Invesco High Yield |
| Global X Adaptive |
Invesco High and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco High and Global X
The main advantage of trading using opposite Invesco High and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco High 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 High vs. Invesco Dividend Achievers | Invesco High vs. Invesco International Dividend | Invesco High vs. First Trust Morningstar | Invesco High vs. WisdomTree High Dividend |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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