Correlation Between First Trust and Invesco Dynamic
Can any of the company-specific risk be diversified away by investing in both First Trust and Invesco Dynamic 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 First Trust and Invesco Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Exchange Traded and Invesco Dynamic Energy, you can compare the effects of market volatilities on First Trust and Invesco Dynamic 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 First Trust with a short position of Invesco Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Invesco Dynamic.
Diversification Opportunities for First Trust and Invesco Dynamic
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and Invesco is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Exchange Traded and Invesco Dynamic Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Dynamic Energy and First Trust 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 First Trust Exchange Traded are associated (or correlated) with Invesco Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Dynamic Energy has no effect on the direction of First Trust i.e., First Trust and Invesco Dynamic go up and down completely randomly.
Pair Corralation between First Trust and Invesco Dynamic
Given the investment horizon of 90 days First Trust Exchange Traded is expected to generate 0.66 times more return on investment than Invesco Dynamic. However, First Trust Exchange Traded is 1.51 times less risky than Invesco Dynamic. It trades about 0.25 of its potential returns per unit of risk. Invesco Dynamic Energy is currently generating about -0.01 per unit of risk. If you would invest 2,635 in First Trust Exchange Traded on July 27, 2025 and sell it today you would earn a total of 491.00 from holding First Trust Exchange Traded or generate 18.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Exchange Traded vs. Invesco Dynamic Energy
Performance |
| Timeline |
| First Trust Exchange |
| Invesco Dynamic Energy |
First Trust and Invesco Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Invesco Dynamic
The main advantage of trading using opposite First Trust and Invesco Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Invesco Dynamic 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 Dynamic will offset losses from the drop in Invesco Dynamic's long position.| First Trust vs. Xtrackers FTSE Developed | First Trust vs. Invesco KBW Regional | First Trust vs. American Century ETF | First Trust vs. iShares International Developed |
| Invesco Dynamic vs. WBI Power Factor | Invesco Dynamic vs. iShares International Developed | Invesco Dynamic vs. Invesco SP SmallCap | Invesco Dynamic vs. WisdomTree International Al |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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