Correlation Between Invesco CurrencyShares and Invesco CurrencyShares
Can any of the company-specific risk be diversified away by investing in both Invesco CurrencyShares and Invesco CurrencyShares 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 CurrencyShares and Invesco CurrencyShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco CurrencyShares British and Invesco CurrencyShares Euro, you can compare the effects of market volatilities on Invesco CurrencyShares and Invesco CurrencyShares 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 CurrencyShares with a short position of Invesco CurrencyShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco CurrencyShares and Invesco CurrencyShares.
Diversification Opportunities for Invesco CurrencyShares and Invesco CurrencyShares
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and Invesco is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Invesco CurrencyShares British and Invesco CurrencyShares Euro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco CurrencyShares and Invesco CurrencyShares 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 CurrencyShares British are associated (or correlated) with Invesco CurrencyShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco CurrencyShares has no effect on the direction of Invesco CurrencyShares i.e., Invesco CurrencyShares and Invesco CurrencyShares go up and down completely randomly.
Pair Corralation between Invesco CurrencyShares and Invesco CurrencyShares
Considering the 90-day investment horizon Invesco CurrencyShares British is expected to under-perform the Invesco CurrencyShares. In addition to that, Invesco CurrencyShares is 1.11 times more volatile than Invesco CurrencyShares Euro. It trades about -0.31 of its total potential returns per unit of risk. Invesco CurrencyShares Euro is currently generating about -0.27 per unit of volatility. If you would invest 10,071 in Invesco CurrencyShares Euro on January 20, 2024 and sell it today you would lose (237.00) from holding Invesco CurrencyShares Euro or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco CurrencyShares British vs. Invesco CurrencyShares Euro
Performance |
| Timeline |
| Invesco CurrencyShares |
| Invesco CurrencyShares |
Invesco CurrencyShares and Invesco CurrencyShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco CurrencyShares and Invesco CurrencyShares
The main advantage of trading using opposite Invesco CurrencyShares and Invesco CurrencyShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco CurrencyShares position performs unexpectedly, Invesco CurrencyShares 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 CurrencyShares will offset losses from the drop in Invesco CurrencyShares' long position.The idea behind Invesco CurrencyShares British and Invesco CurrencyShares Euro pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |