Correlation Between Loncar Cancer and Invesco DWA

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

By analyzing existing cross correlation between Loncar Cancer Immunotherapy and Invesco DWA Healthcare, you can compare the effects of market volatilities on Loncar Cancer and Invesco DWA 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 Loncar Cancer with a short position of Invesco DWA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loncar Cancer and Invesco DWA.

Diversification Opportunities for Loncar Cancer and Invesco DWA

0.91

Correlation Coefficient

Loncar Cancer  Invesco DWA

Almost no diversification

The 3 months correlation between Loncar and Invesco is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Loncar Cancer Immunotherapy and Invesco DWA Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco DWA Healthcare and Loncar Cancer 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 Loncar Cancer Immunotherapy are associated (or correlated) with Invesco DWA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco DWA Healthcare has no effect on the direction of Loncar Cancer i.e., Loncar Cancer and Invesco DWA go up and down completely randomly.

Pair Corralation between Loncar Cancer and Invesco DWA

Given the investment horizon of 90 days Loncar Cancer Immunotherapy is expected to under-perform the Invesco DWA. In addition to that, Loncar Cancer is 1.47 times more volatile than Invesco DWA Healthcare. It trades about -0.19 of its total potential returns per unit of risk. Invesco DWA Healthcare is currently generating about -0.17 per unit of volatility. If you would invest  4,748  in Invesco DWA Healthcare on September 20, 2024 and sell it today you would lose (730.00) from holding Invesco DWA Healthcare or give up 15.37% of portfolio value over 90 days.

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

Loncar Cancer Immunotherapy  vs.  Invesco DWA Healthcare

Loncar Cancer Immuno

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loncar Cancer Immunotherapy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Etf's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Invesco DWA Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco DWA Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the Etf traders.

Pair Trading with Loncar Cancer and Invesco DWA

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

The idea behind Loncar Cancer Immunotherapy and Invesco DWA Healthcare 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.