Correlation Between Global X and Invesco Global

Can any of the company-specific risk be diversified away by investing in both Global X and Invesco Global 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 Global X and Invesco Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global X SuperDividend and Invesco Global Clean, you can compare the effects of market volatilities on Global X and Invesco Global 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 Global X with a short position of Invesco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Invesco Global.

Diversification Opportunities for Global X and Invesco Global

0.67

Correlation Coefficient

Global X  Invesco Global

Poor diversification

The 3 months correlation between Global and Invesco is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Global X SuperDividend and Invesco Global Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Global Clean and Global X 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 Global X SuperDividend are associated (or correlated) with Invesco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Global Clean has no effect on the direction of Global X i.e., Global X and Invesco Global go up and down completely randomly.

Pair Corralation between Global X and Invesco Global

Given the investment horizon of 90 days Global X SuperDividend is expected to generate 0.85 times more return on investment than Invesco Global. However, Global X SuperDividend is 1.18 times less risky than Invesco Global. It trades about 0.02 of its potential returns per unit of risk. Invesco Global Clean is currently generating about 0.02 per unit of risk. If you would invest  1,968  in Global X SuperDividend on February 4, 2024 and sell it today you would earn a total of  8.00  from holding Global X SuperDividend or generate 0.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Global X SuperDividend  vs.  Invesco Global Clean

Global X SuperDividend

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global X SuperDividend are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Global X is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Invesco Global Clean

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Global Clean are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Invesco Global is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Global X and Invesco Global

The main advantage of trading using opposite Global X and Invesco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Invesco Global 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 Global will offset losses from the drop in Invesco Global's long position.

The idea behind Global X SuperDividend and Invesco Global Clean 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.