Correlation Between ETFis Series and Invesco Variable
Can any of the company-specific risk be diversified away by investing in both ETFis Series and Invesco Variable 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 ETFis Series and Invesco Variable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFis Series Trust and Invesco Variable Rate, you can compare the effects of market volatilities on ETFis Series and Invesco Variable 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 ETFis Series with a short position of Invesco Variable. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFis Series and Invesco Variable.
Diversification Opportunities for ETFis Series and Invesco Variable
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ETFis and Invesco is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding ETFis Series Trust and Invesco Variable Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Variable Rate and ETFis Series 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 ETFis Series Trust are associated (or correlated) with Invesco Variable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Variable Rate has no effect on the direction of ETFis Series i.e., ETFis Series and Invesco Variable go up and down completely randomly.
Pair Corralation between ETFis Series and Invesco Variable
Given the investment horizon of 90 days ETFis Series Trust is expected to under-perform the Invesco Variable. In addition to that, ETFis Series is 3.5 times more volatile than Invesco Variable Rate. It trades about -0.08 of its total potential returns per unit of risk. Invesco Variable Rate is currently generating about 0.16 per unit of volatility. If you would invest 2,428 in Invesco Variable Rate on August 31, 2024 and sell it today you would earn a total of 12.00 from holding Invesco Variable Rate or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ETFis Series Trust vs. Invesco Variable Rate
Performance |
| Timeline |
| ETFis Series Trust |
| Invesco Variable Rate |
ETFis Series and Invesco Variable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFis Series and Invesco Variable
The main advantage of trading using opposite ETFis Series and Invesco Variable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFis Series position performs unexpectedly, Invesco Variable 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 Invesco Variable will offset losses from the drop in Invesco Variable's long position.| ETFis Series vs. Virtus InfraCap Preferred | ETFis Series vs. VanEck Preferred Securities | ETFis Series vs. Global X Preferred | ETFis Series vs. Innovator SP Investment |
| Invesco Variable vs. VanEck Preferred Securities | Invesco Variable vs. First Trust Preferred | Invesco Variable vs. SPDR ICE Preferred | Invesco Variable vs. Global X SuperIncome |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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