Correlation Between Main International and Invesco

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

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

Diversification Opportunities for Main International and Invesco

-0.43

Correlation Coefficient

Main International  Invesco

Very good diversification

The 3 months correlation between Main and Invesco is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Main International ETF and Invesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco and Main International 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 Main International ETF are associated (or correlated) with Invesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco has no effect on the direction of Main International i.e., Main International and Invesco go up and down completely randomly.

Pair Corralation between Main International and Invesco

If you would invest  2,727  in Invesco on September 25, 2024 and sell it today you would earn a total of  0.00  from holding Invesco or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Main International ETF  vs.  Invesco

Main International ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Main International ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Main International is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Invesco

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Invesco is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Main International and Invesco

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

The idea behind Main International ETF and Invesco 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.