Correlation Between Invesco Health and KraneShares MSCI
Can any of the company-specific risk be diversified away by investing in both Invesco Health and KraneShares MSCI 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 Health and KraneShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Health Care and KraneShares MSCI China, you can compare the effects of market volatilities on Invesco Health and KraneShares MSCI 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 Health with a short position of KraneShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Health and KraneShares MSCI.
Diversification Opportunities for Invesco Health and KraneShares MSCI
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invesco and KraneShares is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Health Care and KraneShares MSCI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares MSCI China and Invesco Health 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 Health Care are associated (or correlated) with KraneShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares MSCI China has no effect on the direction of Invesco Health i.e., Invesco Health and KraneShares MSCI go up and down completely randomly.
Pair Corralation between Invesco Health and KraneShares MSCI
Assuming the 90 days trading horizon Invesco Health Care is expected to generate 0.53 times more return on investment than KraneShares MSCI. However, Invesco Health Care is 1.87 times less risky than KraneShares MSCI. It trades about -0.03 of its potential returns per unit of risk. KraneShares MSCI China is currently generating about -0.11 per unit of risk. If you would invest 72,018 in Invesco Health Care on August 30, 2024 and sell it today you would lose (566.00) from holding Invesco Health Care or give up 0.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Health Care vs. KraneShares MSCI China
Performance |
| Timeline |
| Invesco Health Care |
| KraneShares MSCI China |
Invesco Health and KraneShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Health and KraneShares MSCI
The main advantage of trading using opposite Invesco Health and KraneShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Health position performs unexpectedly, KraneShares MSCI 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 KraneShares MSCI will offset losses from the drop in KraneShares MSCI's long position.| Invesco Health vs. Invesco MSCI Emerging | Invesco Health vs. Invesco EURO STOXX | Invesco Health vs. Invesco Markets Plc | Invesco Health vs. Invesco FTSE RAFI |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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