Correlation Between Exchange Traded and Invesco Golden

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

By analyzing existing cross correlation between Exchange Traded Concepts and Invesco Golden Dragon, you can compare the effects of market volatilities on Exchange Traded and Invesco Golden 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 Exchange Traded with a short position of Invesco Golden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Traded and Invesco Golden.

Diversification Opportunities for Exchange Traded and Invesco Golden

0.28

Correlation Coefficient

Exchange Traded  Invesco Golden

Modest diversification

The 3 months correlation between Exchange and Invesco is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts and Invesco Golden Dragon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Golden Dragon and Exchange Traded 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 Exchange Traded Concepts are associated (or correlated) with Invesco Golden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Golden Dragon has no effect on the direction of Exchange Traded i.e., Exchange Traded and Invesco Golden go up and down completely randomly.

Pair Corralation between Exchange Traded and Invesco Golden

If you would invest  2,432  in Invesco Golden Dragon on September 25, 2024 and sell it today you would earn a total of  235.00  from holding Invesco Golden Dragon or generate 9.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Exchange Traded Concepts  vs.  Invesco Golden Dragon

Exchange Traded Concepts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exchange Traded Concepts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Exchange Traded is not utilizing all of its potentials. The new stock price disturbance, may contribute to short-term losses for the investors.

Invesco Golden Dragon

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Golden Dragon are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent technical and fundamental indicators, Invesco Golden may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Exchange Traded and Invesco Golden

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

The idea behind Exchange Traded Concepts and Invesco Golden Dragon 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.