Correlation Between Invesco Physical and Enbridge
Can any of the company-specific risk be diversified away by investing in both Invesco Physical and Enbridge 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 Physical and Enbridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Physical Silver and Enbridge, you can compare the effects of market volatilities on Invesco Physical and Enbridge 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 Physical with a short position of Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Physical and Enbridge.
Diversification Opportunities for Invesco Physical and Enbridge
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Enbridge is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Physical Silver and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge and Invesco Physical 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 Physical Silver are associated (or correlated) with Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge has no effect on the direction of Invesco Physical i.e., Invesco Physical and Enbridge go up and down completely randomly.
Pair Corralation between Invesco Physical and Enbridge
Assuming the 90 days trading horizon Invesco Physical is expected to generate 1.45 times less return on investment than Enbridge. In addition to that, Invesco Physical is 1.74 times more volatile than Enbridge. It trades about 0.08 of its total potential returns per unit of risk. Enbridge is currently generating about 0.19 per unit of volatility. If you would invest 4,425 in Enbridge on September 4, 2024 and sell it today you would earn a total of 1,616 from holding Enbridge or generate 36.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 63.45% |
| Values | Daily Returns |
Invesco Physical Silver vs. Enbridge
Performance |
| Timeline |
| Invesco Physical Silver |
| Enbridge |
Invesco Physical and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Physical and Enbridge
The main advantage of trading using opposite Invesco Physical and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Physical position performs unexpectedly, Enbridge 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 Enbridge will offset losses from the drop in Enbridge's long position.| Invesco Physical vs. Fidelity National Information | Invesco Physical vs. Cellnex Telecom SA | Invesco Physical vs. Gamma Communications PLC | Invesco Physical vs. Zoom Video Communications |
| Enbridge vs. Broadcom | Enbridge vs. Scandinavian Tobacco Group | Enbridge vs. Invesco Physical Silver | Enbridge vs. Alliance Data Systems |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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