Correlation Between Invesco Preferred and Global X
Can any of the company-specific risk be diversified away by investing in both Invesco Preferred 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 Preferred 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 Preferred ETF and Global X SuperDividend, you can compare the effects of market volatilities on Invesco Preferred 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 Preferred with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Preferred and Global X.
Diversification Opportunities for Invesco Preferred and Global X
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Invesco and Global is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Preferred ETF and Global X SuperDividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SuperDividend and Invesco Preferred 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 Preferred ETF 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 SuperDividend has no effect on the direction of Invesco Preferred i.e., Invesco Preferred and Global X go up and down completely randomly.
Pair Corralation between Invesco Preferred and Global X
Considering the 90-day investment horizon Invesco Preferred is expected to generate 1.07 times less return on investment than Global X. But when comparing it to its historical volatility, Invesco Preferred ETF is 1.04 times less risky than Global X. It trades about 0.04 of its potential returns per unit of risk. Global X SuperDividend is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,695 in Global X SuperDividend on August 31, 2024 and sell it today you would earn a total of 232.00 from holding Global X SuperDividend or generate 13.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Invesco Preferred ETF vs. Global X SuperDividend
Performance |
| Timeline |
| Invesco Preferred ETF |
| Global X SuperDividend |
Invesco Preferred and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Preferred and Global X
The main advantage of trading using opposite Invesco Preferred and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Preferred 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 Preferred vs. Invesco Financial Preferred | Invesco Preferred vs. iShares Preferred and | Invesco Preferred vs. VanEck Preferred Securities | Invesco Preferred vs. SPDR ICE Preferred |
| Global X vs. Global X SuperDividend | Global X vs. Invesco KBW High | Global X vs. Global X SuperDividend | Global X 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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