Correlation Between Invesco Financial and Global X
Can any of the company-specific risk be diversified away by investing in both Invesco Financial 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 Financial 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 Financial Preferred and Global X Preferred, you can compare the effects of market volatilities on Invesco Financial 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 Financial with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Financial and Global X.
Diversification Opportunities for Invesco Financial and Global X
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Global is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Financial Preferred and Global X Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Preferred and Invesco Financial 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 Financial Preferred 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 Preferred has no effect on the direction of Invesco Financial i.e., Invesco Financial and Global X go up and down completely randomly.
Pair Corralation between Invesco Financial and Global X
Considering the 90-day investment horizon Invesco Financial is expected to generate 1.44 times less return on investment than Global X. In addition to that, Invesco Financial is 1.1 times more volatile than Global X Preferred. It trades about 0.03 of its total potential returns per unit of risk. Global X Preferred is currently generating about 0.05 per unit of volatility. If you would invest 1,918 in Global X Preferred on August 29, 2024 and sell it today you would earn a total of 116.00 from holding Global X Preferred or generate 6.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Financial Preferred vs. Global X Preferred
Performance |
| Timeline |
| Invesco Financial |
| Global X Preferred |
Invesco Financial and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Financial and Global X
The main advantage of trading using opposite Invesco Financial and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Financial 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 Financial vs. Invesco Preferred ETF | Invesco Financial vs. iShares Preferred and | Invesco Financial vs. SPDR ICE Preferred | Invesco Financial vs. VanEck Preferred Securities |
| Global X vs. VanEck Preferred Securities | Global X vs. Global X SuperIncome | Global X vs. Virtus InfraCap Preferred | Global X vs. SPDR ICE Preferred |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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