Correlation Between Invesco CurrencyShares and BlackRock Industry

Can any of the company-specific risk be diversified away by investing in both Invesco CurrencyShares and BlackRock Industry 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 BlackRock Industry 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 BlackRock Industry Rotation, you can compare the effects of market volatilities on Invesco CurrencyShares and BlackRock Industry 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 BlackRock Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco CurrencyShares and BlackRock Industry.

Diversification Opportunities for Invesco CurrencyShares and BlackRock Industry

-0.83

Correlation Coefficient

Invesco CurrencyShares  BlackRock Industry

Pay attention - limited upside

The 3 months correlation between Invesco and BlackRock is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Invesco CurrencyShares Japanes and BlackRock Industry Rotation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Industry 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 BlackRock Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Industry has no effect on the direction of Invesco CurrencyShares i.e., Invesco CurrencyShares and BlackRock Industry go up and down completely randomly.

Pair Corralation between Invesco CurrencyShares and BlackRock Industry

Considering the 90-day investment horizon Invesco CurrencyShares Japanese is expected to under-perform the BlackRock Industry. But the etf apears to be less risky and, when comparing its historical volatility, Invesco CurrencyShares Japanese is 1.03 times less risky than BlackRock Industry. The etf trades about -0.06 of its potential returns per unit of risk. The BlackRock Industry Rotation is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  2,569  in BlackRock Industry Rotation on September 1, 2024 and sell it today you would earn a total of  300.00  from holding BlackRock Industry Rotation or generate 11.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Invesco CurrencyShares Japanes  vs.  BlackRock Industry Rotation

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 fairly strong basic indicators, Invesco CurrencyShares is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

BlackRock Industry

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Industry Rotation are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, BlackRock Industry may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Invesco CurrencyShares and BlackRock Industry

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

The idea behind Invesco CurrencyShares Japanese and BlackRock Industry Rotation 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.