Correlation Between Invesco International and Xtrackers MSCI
Can any of the company-specific risk be diversified away by investing in both Invesco International and Xtrackers MSCI 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 International and Xtrackers MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco International Dividend and Xtrackers MSCI EAFE, you can compare the effects of market volatilities on Invesco International and Xtrackers MSCI 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 International with a short position of Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco International and Xtrackers MSCI.
Diversification Opportunities for Invesco International and Xtrackers MSCI
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and Xtrackers is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Invesco International Dividend and Xtrackers MSCI EAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI EAFE and Invesco International 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 International Dividend are associated (or correlated) with Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI EAFE has no effect on the direction of Invesco International i.e., Invesco International and Xtrackers MSCI go up and down completely randomly.
Pair Corralation between Invesco International and Xtrackers MSCI
Considering the 90-day investment horizon Invesco International is expected to generate 1.32 times less return on investment than Xtrackers MSCI. But when comparing it to its historical volatility, Invesco International Dividend is 1.05 times less risky than Xtrackers MSCI. It trades about 0.19 of its potential returns per unit of risk. Xtrackers MSCI EAFE is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,397 in Xtrackers MSCI EAFE on October 20, 2024 and sell it today you would earn a total of 67.00 from holding Xtrackers MSCI EAFE or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco International Dividend vs. Xtrackers MSCI EAFE
Performance |
| Timeline |
| Invesco International |
| Xtrackers MSCI EAFE |
Invesco International and Xtrackers MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco International and Xtrackers MSCI
The main advantage of trading using opposite Invesco International and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco International position performs unexpectedly, Xtrackers MSCI 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 Xtrackers MSCI will offset losses from the drop in Xtrackers MSCI's long position.| Invesco International vs. Invesco Dividend Achievers | Invesco International vs. Invesco High Yield | Invesco International vs. Invesco Dynamic Large | Invesco International vs. SPDR SP International |
| Xtrackers MSCI vs. iShares MSCI EAFE | Xtrackers MSCI vs. Schwab Fundamental International | Xtrackers MSCI vs. Vanguard International High | Xtrackers MSCI vs. iShares International Select |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |