Correlation Between Vast Renewables and Invesco Technology

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

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

Diversification Opportunities for Vast Renewables and Invesco Technology

-0.8

Correlation Coefficient

Vast Renewables  Invesco Technology

Pay attention - limited upside

The 3 months correlation between Vast and Invesco is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Vast Renewables Limited and Invesco Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Technology and Vast Renewables 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 Vast Renewables Limited are associated (or correlated) with Invesco Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Technology has no effect on the direction of Vast Renewables i.e., Vast Renewables and Invesco Technology go up and down completely randomly.

Pair Corralation between Vast Renewables and Invesco Technology

Assuming the 90 days horizon Vast Renewables Limited is expected to generate 57.46 times more return on investment than Invesco Technology. However, Vast Renewables is 57.46 times more volatile than Invesco Technology Fund. It trades about 0.14 of its potential returns per unit of risk. Invesco Technology Fund is currently generating about 0.28 per unit of risk. If you would invest  3.40  in Vast Renewables Limited on May 5, 2025 and sell it today you would lose (1.40) from holding Vast Renewables Limited or give up 41.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	28.57%
Values	Daily Returns

Vast Renewables Limited  vs.  Invesco Technology Fund

Vast Renewables

Risk-Adjusted Performance

OK

Over the last 90 days Vast Renewables Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak technical and fundamental indicators, Vast Renewables showed solid returns over the last few months and may actually be approaching a breakup point.

Invesco Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Technology Fund are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Invesco Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vast Renewables and Invesco Technology

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

The idea behind Vast Renewables Limited and Invesco Technology Fund 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.