Correlation Between Invesco Global and BFIT

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

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

Diversification Opportunities for Invesco Global and BFIT

0.0

Correlation Coefficient

Invesco Global  BFIT

Pay attention - limited upside

The 3 months correlation between Invesco and BFIT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Global Clean and BFIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BFIT and Invesco Global 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 Global Clean are associated (or correlated) with BFIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BFIT has no effect on the direction of Invesco Global i.e., Invesco Global and BFIT go up and down completely randomly.

Pair Corralation between Invesco Global and BFIT

If you would invest  2,139  in BFIT on September 17, 2024 and sell it today you would earn a total of  0.00  from holding BFIT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	3.08%
Values	Daily Returns

Invesco Global Clean  vs.  BFIT

Invesco Global Clean

Risk-Adjusted Performance

0 of 100

Very Weak

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

BFIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BFIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, BFIT is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Invesco Global and BFIT

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

The idea behind Invesco Global Clean and BFIT 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.