Correlation Between Invesco Growth and Federated High
Can any of the company-specific risk be diversified away by investing in both Invesco Growth and Federated High 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 Growth and Federated High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Growth Allocation and Federated High Yield, you can compare the effects of market volatilities on Invesco Growth and Federated High 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 Growth with a short position of Federated High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Growth and Federated High.
Diversification Opportunities for Invesco Growth and Federated High
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Federated is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Growth Allocation and Federated High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated High Yield and Invesco Growth 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 Growth Allocation are associated (or correlated) with Federated High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated High Yield has no effect on the direction of Invesco Growth i.e., Invesco Growth and Federated High go up and down completely randomly.
Pair Corralation between Invesco Growth and Federated High
Assuming the 90 days horizon Invesco Growth Allocation is expected to generate 2.91 times more return on investment than Federated High. However, Invesco Growth is 2.91 times more volatile than Federated High Yield. It trades about 0.06 of its potential returns per unit of risk. Federated High Yield is currently generating about 0.16 per unit of risk. If you would invest 1,406 in Invesco Growth Allocation on November 3, 2024 and sell it today you would earn a total of 142.00 from holding Invesco Growth Allocation or generate 10.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Growth Allocation vs. Federated High Yield
Performance |
| Timeline |
| Invesco Growth Allocation |
| Federated High Yield |
Invesco Growth and Federated High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Growth and Federated High
The main advantage of trading using opposite Invesco Growth and Federated High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Growth position performs unexpectedly, Federated High 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 Federated High will offset losses from the drop in Federated High's long position.| Invesco Growth vs. Dreyfus Technology Growth | Invesco Growth vs. Invesco Technology Fund | Invesco Growth vs. Allianzgi Technology Fund | Invesco Growth vs. Columbia Global Technology |
| Federated High vs. Janus High Yield Fund | Federated High vs. Northeast Investors Trust | Federated High vs. High Yield Fund Investor | Federated High vs. Ab Sustainable Thematic |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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