Correlation Between Invesco BulletShares and Barclays Capital

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

By analyzing existing cross correlation between Invesco BulletShares 2024 and Barclays Capital, you can compare the effects of market volatilities on Invesco BulletShares and Barclays Capital 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 BulletShares with a short position of Barclays Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco BulletShares and Barclays Capital.

Diversification Opportunities for Invesco BulletShares and Barclays Capital

-0.76

Correlation Coefficient

Invesco BulletShares  Barclays Capital

Pay attention - limited upside

The 3 months correlation between Invesco and Barclays is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Invesco BulletShares 2024 and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital and Invesco BulletShares 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 BulletShares 2024 are associated (or correlated) with Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of Invesco BulletShares i.e., Invesco BulletShares and Barclays Capital go up and down completely randomly.

Pair Corralation between Invesco BulletShares and Barclays Capital

If you would invest  2,097  in Invesco BulletShares 2024 on September 22, 2024 and sell it today you would earn a total of  15.00  from holding Invesco BulletShares 2024 or generate 0.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	2.44%
Values	Daily Returns

Invesco BulletShares 2024  vs.  Barclays Capital

Invesco BulletShares 2024

Risk-Adjusted Performance

48 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco BulletShares 2024 are ranked lower than 48 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Invesco BulletShares is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Barclays Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barclays Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Barclays Capital is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Invesco BulletShares and Barclays Capital

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

The idea behind Invesco BulletShares 2024 and Barclays Capital 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .