Correlation Between Invesco Global and BFIT
Can any of the company-specific risk be diversified away by investing in both Invesco Global and BFIT 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 Global and BFIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Global Listed and BFIT, you can compare the effects of market volatilities on Invesco Global and BFIT 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 Global with a short position of BFIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Global and BFIT.
Diversification Opportunities for Invesco Global and BFIT
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and BFIT is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Global Listed and BFIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BFIT and Invesco Global 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 Global Listed are associated (or correlated) with BFIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BFIT has no effect on the direction of Invesco Global i.e., Invesco Global and BFIT go up and down completely randomly.
Pair Corralation between Invesco Global and BFIT
Considering the 90-day investment horizon Invesco Global Listed is expected to generate 1.07 times more return on investment than BFIT. However, Invesco Global is 1.07 times more volatile than BFIT. It trades about 0.09 of its potential returns per unit of risk. BFIT is currently generating about 0.05 per unit of risk. If you would invest 4,316 in Invesco Global Listed on August 27, 2024 and sell it today you would earn a total of 2,777 from holding Invesco Global Listed or generate 64.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.85% |
| Values | Daily Returns |
Invesco Global Listed vs. BFIT
Performance |
| Timeline |
| Invesco Global Listed |
| BFIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Invesco Global and BFIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Global and BFIT
The main advantage of trading using opposite Invesco Global and BFIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Global position performs unexpectedly, BFIT 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 BFIT will offset losses from the drop in BFIT's long position.| Invesco Global vs. Main Sector Rotation | Invesco Global vs. Franklin Exponential Data | Invesco Global vs. Goldman Sachs Innovate |
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.
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