Correlation Between Invesco DWA and EA Series
Can any of the company-specific risk be diversified away by investing in both Invesco DWA and EA Series 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 DWA and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco DWA Utilities and EA Series Trust, you can compare the effects of market volatilities on Invesco DWA and EA Series 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 DWA with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco DWA and EA Series.
Diversification Opportunities for Invesco DWA and EA Series
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Invesco and SHOC is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Invesco DWA Utilities and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust and Invesco DWA 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 DWA Utilities are associated (or correlated) with EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of Invesco DWA i.e., Invesco DWA and EA Series go up and down completely randomly.
Pair Corralation between Invesco DWA and EA Series
Considering the 90-day investment horizon Invesco DWA Utilities is expected to generate 0.56 times more return on investment than EA Series. However, Invesco DWA Utilities is 1.78 times less risky than EA Series. It trades about 0.28 of its potential returns per unit of risk. EA Series Trust is currently generating about -0.05 per unit of risk. If you would invest 4,018 in Invesco DWA Utilities on August 28, 2024 and sell it today you would earn a total of 253.00 from holding Invesco DWA Utilities or generate 6.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco DWA Utilities vs. EA Series Trust
Performance |
| Timeline |
| Invesco DWA Utilities |
| EA Series Trust |
Invesco DWA and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco DWA and EA Series
The main advantage of trading using opposite Invesco DWA and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco DWA position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.| Invesco DWA vs. Global X CleanTech | Invesco DWA vs. Global X Clean | Invesco DWA vs. Global X Wind | Invesco DWA vs. Global X Thematic |
| EA Series vs. Invesco DWA Utilities | EA Series vs. Invesco Dynamic Large | EA Series vs. Invesco Dynamic Large | EA Series vs. HUMANA INC |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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