Correlation Between Invesco SP and Loncar Cancer

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

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

Diversification Opportunities for Invesco SP and Loncar Cancer

-0.11

Correlation Coefficient

Invesco SP  Loncar Cancer

Good diversification

The 3 months correlation between Invesco and Loncar is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP SmallCap and Loncar Cancer Immunotherapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loncar Cancer Immuno and Invesco SP 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 SP SmallCap are associated (or correlated) with Loncar Cancer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loncar Cancer Immuno has no effect on the direction of Invesco SP i.e., Invesco SP and Loncar Cancer go up and down completely randomly.

Pair Corralation between Invesco SP and Loncar Cancer

Given the investment horizon of 90 days Invesco SP SmallCap is expected to generate 0.58 times more return on investment than Loncar Cancer. However, Invesco SP SmallCap is 1.73 times less risky than Loncar Cancer. It trades about -0.1 of its potential returns per unit of risk. Loncar Cancer Immunotherapy is currently generating about -0.18 per unit of risk. If you would invest  4,592  in Invesco SP SmallCap on September 22, 2024 and sell it today you would lose (135.00) from holding Invesco SP SmallCap or give up 2.94% of portfolio value over 90 days.

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

Invesco SP SmallCap  vs.  Loncar Cancer Immunotherapy

Invesco SP SmallCap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco SP SmallCap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Invesco SP is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Loncar Cancer Immuno

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loncar Cancer Immunotherapy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Etf's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Pair Trading with Invesco SP and Loncar Cancer

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

The idea behind Invesco SP SmallCap and Loncar Cancer Immunotherapy 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.