Correlation Between Global X and Invesco WilderHill

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

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

Diversification Opportunities for Global X and Invesco WilderHill

-0.07

Correlation Coefficient

Global X  Invesco WilderHill

Good diversification

The 3 months correlation between Global and Invesco is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Global X CleanTech and Invesco WilderHill Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco WilderHill 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 CleanTech are associated (or correlated) with Invesco WilderHill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco WilderHill Clean has no effect on the direction of Global X i.e., Global X and Invesco WilderHill go up and down completely randomly.

Pair Corralation between Global X and Invesco WilderHill

Given the investment horizon of 90 days Global X CleanTech is expected to under-perform the Invesco WilderHill. But the etf apears to be less risky and, when comparing its historical volatility, Global X CleanTech is 1.01 times less risky than Invesco WilderHill. The etf trades about -0.08 of its potential returns per unit of risk. The Invesco WilderHill Clean is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,912  in Invesco WilderHill Clean on September 23, 2024 and sell it today you would earn a total of  93.00  from holding Invesco WilderHill Clean or generate 4.86% return on investment over 90 days.

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

Global X CleanTech  vs.  Invesco WilderHill Clean

Global X CleanTech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X CleanTech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Etf's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Invesco WilderHill Clean

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco WilderHill Clean are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental drivers, Invesco WilderHill is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Global X and Invesco WilderHill

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

The idea behind Global X CleanTech and Invesco WilderHill 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.