Correlation Between Invesco Growth and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both Invesco Growth and Invesco Municipal 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 Invesco Municipal 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 Invesco Municipal Income, you can compare the effects of market volatilities on Invesco Growth and Invesco Municipal 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 Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Growth and Invesco Municipal.
Diversification Opportunities for Invesco Growth and Invesco Municipal
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Invesco and Invesco is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Growth Allocation and Invesco Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Income 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 Invesco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Income has no effect on the direction of Invesco Growth i.e., Invesco Growth and Invesco Municipal go up and down completely randomly.
Pair Corralation between Invesco Growth and Invesco Municipal
Assuming the 90 days horizon Invesco Growth Allocation is expected to generate 1.67 times more return on investment than Invesco Municipal. However, Invesco Growth is 1.67 times more volatile than Invesco Municipal Income. It trades about 0.34 of its potential returns per unit of risk. Invesco Municipal Income is currently generating about 0.19 per unit of risk. If you would invest 1,556 in Invesco Growth Allocation on September 1, 2024 and sell it today you would earn a total of 68.00 from holding Invesco Growth Allocation or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Invesco Growth Allocation vs. Invesco Municipal Income
Performance |
| Timeline |
| Invesco Growth Allocation |
| Invesco Municipal Income |
Invesco Growth and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Growth and Invesco Municipal
The main advantage of trading using opposite Invesco Growth and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Growth position performs unexpectedly, Invesco Municipal 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 Municipal will offset losses from the drop in Invesco Municipal's long position.| Invesco Growth vs. Calvert Moderate Allocation | Invesco Growth vs. Lifestyle Ii Moderate | Invesco Growth vs. Wisdomtree Siegel Moderate | Invesco Growth vs. Saat Moderate Strategy |
| Invesco Municipal vs. Harbor Diversified International | Invesco Municipal vs. Fidelity Advisor Diversified | Invesco Municipal vs. Small Cap Stock | Invesco Municipal vs. Adams Diversified Equity |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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