Correlation Between Associated Capital and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both Associated Capital 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 Associated Capital and Invesco Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Invesco Municipal Trust, you can compare the effects of market volatilities on Associated Capital 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 Associated Capital with a short position of Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Invesco Municipal.
Diversification Opportunities for Associated Capital and Invesco Municipal
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Associated and Invesco is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Invesco Municipal Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Trust and Associated Capital 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 Associated Capital Group 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 Trust has no effect on the direction of Associated Capital i.e., Associated Capital and Invesco Municipal go up and down completely randomly.
Pair Corralation between Associated Capital and Invesco Municipal
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 1.66 times less return on investment than Invesco Municipal. In addition to that, Associated Capital is 1.85 times more volatile than Invesco Municipal Trust. It trades about 0.05 of its total potential returns per unit of risk. Invesco Municipal Trust is currently generating about 0.17 per unit of volatility. If you would invest 1,003 in Invesco Municipal Trust on September 1, 2024 and sell it today you would earn a total of 26.00 from holding Invesco Municipal Trust or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Invesco Municipal Trust
Performance |
| Timeline |
| Associated Capital |
| Invesco Municipal Trust |
Associated Capital and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Invesco Municipal
The main advantage of trading using opposite Associated Capital and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital 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.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
| Invesco Municipal vs. Visa Class A | Invesco Municipal vs. Diamond Hill Investment | Invesco Municipal vs. Distoken Acquisition | Invesco Municipal vs. Associated Capital Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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