Correlation Between Invesco Global and Boston Partners
Can any of the company-specific risk be diversified away by investing in both Invesco Global and Boston Partners 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 Global and Boston Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Global Real and Boston Partners Small, you can compare the effects of market volatilities on Invesco Global and Boston Partners 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 Global with a short position of Boston Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Global and Boston Partners.
Diversification Opportunities for Invesco Global and Boston Partners
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invesco and Boston is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Global Real and Boston Partners Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Partners Small and Invesco 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 Invesco Global Real are associated (or correlated) with Boston Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Partners Small has no effect on the direction of Invesco Global i.e., Invesco Global and Boston Partners go up and down completely randomly.
Pair Corralation between Invesco Global and Boston Partners
Assuming the 90 days horizon Invesco Global Real is expected to under-perform the Boston Partners. But the mutual fund apears to be less risky and, when comparing its historical volatility, Invesco Global Real is 1.44 times less risky than Boston Partners. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Boston Partners Small is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,892 in Boston Partners Small on September 13, 2024 and sell it today you would earn a total of 26.00 from holding Boston Partners Small or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Global Real vs. Boston Partners Small
Performance |
| Timeline |
| Invesco Global Real |
| Boston Partners Small |
Invesco Global and Boston Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Global and Boston Partners
The main advantage of trading using opposite Invesco Global and Boston Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Global position performs unexpectedly, Boston Partners 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 Boston Partners will offset losses from the drop in Boston Partners' long position.| Invesco Global vs. Invesco Municipal Income | Invesco Global vs. Invesco Municipal Income | Invesco Global vs. Invesco Municipal Income | Invesco Global vs. Oppenheimer Rising Dividends |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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