Correlation Between Invesco CurrencyShares and EGSHARES BLUE

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

By analyzing existing cross correlation between Invesco CurrencyShares Japanese and EGSHARES BLUE CHIP, you can compare the effects of market volatilities on Invesco CurrencyShares and EGSHARES BLUE 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 CurrencyShares with a short position of EGSHARES BLUE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco CurrencyShares and EGSHARES BLUE.

Diversification Opportunities for Invesco CurrencyShares and EGSHARES BLUE

-0.51

Correlation Coefficient

Invesco CurrencyShares  EGSHARES BLUE

Excellent diversification

The 3 months correlation between Invesco and EGSHARES is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Invesco CurrencyShares Japanes and EGSHARES BLUE CHIP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EGSHARES BLUE CHIP and Invesco CurrencyShares 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 CurrencyShares Japanese are associated (or correlated) with EGSHARES BLUE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EGSHARES BLUE CHIP has no effect on the direction of Invesco CurrencyShares i.e., Invesco CurrencyShares and EGSHARES BLUE go up and down completely randomly.

Pair Corralation between Invesco CurrencyShares and EGSHARES BLUE

Considering the 90-day investment horizon Invesco CurrencyShares Japanese is expected to under-perform the EGSHARES BLUE. But the etf apears to be less risky and, when comparing its historical volatility, Invesco CurrencyShares Japanese is 1.32 times less risky than EGSHARES BLUE. The etf trades about -0.08 of its potential returns per unit of risk. The EGSHARES BLUE CHIP is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  3,229  in EGSHARES BLUE CHIP on September 23, 2024 and sell it today you would earn a total of  220.00  from holding EGSHARES BLUE CHIP or generate 6.81% return on investment over 90 days.

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

Invesco CurrencyShares Japanes  vs.  EGSHARES BLUE CHIP

Invesco CurrencyShares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco CurrencyShares Japanese has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

EGSHARES BLUE CHIP

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EGSHARES BLUE CHIP are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical indicators, EGSHARES BLUE is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Invesco CurrencyShares and EGSHARES BLUE

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

The idea behind Invesco CurrencyShares Japanese and EGSHARES BLUE CHIP 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.

Check out your portfolio center.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.