Correlation Between Short Oil and Invesco Select
Can any of the company-specific risk be diversified away by investing in both Short Oil and Invesco Select 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 Short Oil and Invesco Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Oil Gas and Invesco Select Risk, you can compare the effects of market volatilities on Short Oil and Invesco Select 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 Short Oil with a short position of Invesco Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Oil and Invesco Select.
Diversification Opportunities for Short Oil and Invesco Select
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Short and Invesco is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Short Oil Gas and Invesco Select Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Select Risk and Short Oil 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 Short Oil Gas are associated (or correlated) with Invesco Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Select Risk has no effect on the direction of Short Oil i.e., Short Oil and Invesco Select go up and down completely randomly.
Pair Corralation between Short Oil and Invesco Select
Assuming the 90 days horizon Short Oil Gas is expected to under-perform the Invesco Select. In addition to that, Short Oil is 1.96 times more volatile than Invesco Select Risk. It trades about -0.35 of its total potential returns per unit of risk. Invesco Select Risk is currently generating about 0.18 per unit of volatility. If you would invest 1,113 in Invesco Select Risk on October 30, 2024 and sell it today you would earn a total of 20.00 from holding Invesco Select Risk or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Short Oil Gas vs. Invesco Select Risk
Performance |
| Timeline |
| Short Oil Gas |
| Invesco Select Risk |
Short Oil and Invesco Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Oil and Invesco Select
The main advantage of trading using opposite Short Oil and Invesco Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Oil position performs unexpectedly, Invesco Select 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 Invesco Select will offset losses from the drop in Invesco Select's long position.| Short Oil vs. Intermediate Term Tax Free Bond | Short Oil vs. Gurtin California Muni | Short Oil vs. American High Income Municipal | Short Oil vs. Blrc Sgy Mnp |
| Invesco Select vs. Rmb Mendon Financial | Invesco Select vs. Vanguard Financials Index | Invesco Select vs. Prudential Financial Services | Invesco Select vs. Financial Industries Fund |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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