Correlation Between Xtrackers and Invesco Health
Can any of the company-specific risk be diversified away by investing in both Xtrackers and Invesco Health 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 Xtrackers and Invesco Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers SP 500 and Invesco Health Care, you can compare the effects of market volatilities on Xtrackers and Invesco Health 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 Xtrackers with a short position of Invesco Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and Invesco Health.
Diversification Opportunities for Xtrackers and Invesco Health
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Invesco is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers SP 500 and Invesco Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Health Care and Xtrackers 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 Xtrackers SP 500 are associated (or correlated) with Invesco Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Health Care has no effect on the direction of Xtrackers i.e., Xtrackers and Invesco Health go up and down completely randomly.
Pair Corralation between Xtrackers and Invesco Health
Assuming the 90 days trading horizon Xtrackers SP 500 is expected to generate 2.01 times more return on investment than Invesco Health. However, Xtrackers is 2.01 times more volatile than Invesco Health Care. It trades about 0.15 of its potential returns per unit of risk. Invesco Health Care is currently generating about -0.11 per unit of risk. If you would invest 23,098 in Xtrackers SP 500 on August 29, 2024 and sell it today you would earn a total of 1,298 from holding Xtrackers SP 500 or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers SP 500 vs. Invesco Health Care
Performance |
| Timeline |
| Xtrackers SP 500 |
| Invesco Health Care |
Xtrackers and Invesco Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers and Invesco Health
The main advantage of trading using opposite Xtrackers and Invesco Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers position performs unexpectedly, Invesco Health 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 Health will offset losses from the drop in Invesco Health's long position.| Xtrackers vs. GraniteShares 3x Short | Xtrackers vs. WisdomTree Natural Gas | Xtrackers vs. Leverage Shares 3x | Xtrackers vs. WisdomTree Natural Gas |
| Invesco Health vs. Invesco MSCI Emerging | Invesco Health vs. Invesco EURO STOXX | Invesco Health vs. Invesco Markets Plc | Invesco Health vs. Invesco FTSE RAFI |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |