Correlation Between Invesco Global and Main Thematic
Can any of the company-specific risk be diversified away by investing in both Invesco Global and Main Thematic 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 Main Thematic 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 Main Thematic Innovation, you can compare the effects of market volatilities on Invesco Global and Main Thematic 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 Main Thematic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Global and Main Thematic.
Diversification Opportunities for Invesco Global and Main Thematic
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Main is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Global Listed and Main Thematic Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Main Thematic Innovation 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 Main Thematic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Main Thematic Innovation has no effect on the direction of Invesco Global i.e., Invesco Global and Main Thematic go up and down completely randomly.
Pair Corralation between Invesco Global and Main Thematic
Considering the 90-day investment horizon Invesco Global is expected to generate 1.67 times less return on investment than Main Thematic. But when comparing it to its historical volatility, Invesco Global Listed is 1.36 times less risky than Main Thematic. It trades about 0.09 of its potential returns per unit of risk. Main Thematic Innovation is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,710 in Main Thematic Innovation on August 24, 2024 and sell it today you would earn a total of 393.00 from holding Main Thematic Innovation or generate 22.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Global Listed vs. Main Thematic Innovation
Performance |
| Timeline |
| Invesco Global Listed |
| Main Thematic Innovation |
Invesco Global and Main Thematic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Global and Main Thematic
The main advantage of trading using opposite Invesco Global and Main Thematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Global position performs unexpectedly, Main Thematic 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 Main Thematic will offset losses from the drop in Main Thematic's long position.| Invesco Global vs. Invesco WilderHill Clean | Invesco Global vs. First Trust Global | Invesco Global vs. First Trust NASDAQ | Invesco Global vs. ALPS Clean Energy |
| Main Thematic vs. Invesco WilderHill Clean | Main Thematic vs. First Trust Global | Main Thematic vs. First Trust NASDAQ | Main Thematic vs. ALPS Clean Energy |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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