Correlation Between Ab Global and Invesco High

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Can any of the company-specific risk be diversified away by investing in both Ab Global and Invesco 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 Ab Global and Invesco High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Bond and Invesco High Yield, you can compare the effects of market volatilities on Ab Global and Invesco 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 Ab Global with a short position of Invesco High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Invesco High.

Diversification Opportunities for Ab Global and Invesco High

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between ANAGX and Invesco is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Invesco High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco High Yield and Ab Global 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 Ab Global Bond are associated (or correlated) with Invesco High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco High Yield has no effect on the direction of Ab Global i.e., Ab Global and Invesco High go up and down completely randomly.

Pair Corralation between Ab Global and Invesco High

Assuming the 90 days horizon Ab Global is expected to generate 1.92 times less return on investment than Invesco High. In addition to that, Ab Global is 1.19 times more volatile than Invesco High Yield. It trades about 0.11 of its total potential returns per unit of risk. Invesco High Yield is currently generating about 0.25 per unit of volatility. If you would invest  355.00  in Invesco High Yield on August 27, 2024 and sell it today you would earn a total of  3.00  from holding Invesco High Yield or generate 0.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ab Global Bond  vs.  Invesco High Yield

 Performance 
       Timeline  
Ab Global Bond 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ab Global Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Ab Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Invesco High Yield 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Invesco High Yield are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Invesco High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ab Global and Invesco High Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ab Global and Invesco High

The main advantage of trading using opposite Ab Global and Invesco High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Invesco 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 Invesco High will offset losses from the drop in Invesco High's long position.
The idea behind Ab Global Bond and Invesco High Yield 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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