Correlation Between Bank of America and Invesco Trust
Can any of the company-specific risk be diversified away by investing in both Bank of America and Invesco Trust 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 Bank of America and Invesco Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Invesco Trust For, you can compare the effects of market volatilities on Bank of America and Invesco Trust 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 Bank of America with a short position of Invesco Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Invesco Trust.
Diversification Opportunities for Bank of America and Invesco Trust
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Invesco is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Invesco Trust For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Trust For and Bank of America 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 Bank of America are associated (or correlated) with Invesco Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Trust For has no effect on the direction of Bank of America i.e., Bank of America and Invesco Trust go up and down completely randomly.
Pair Corralation between Bank of America and Invesco Trust
Considering the 90-day investment horizon Bank of America is expected to generate 4.12 times more return on investment than Invesco Trust. However, Bank of America is 4.12 times more volatile than Invesco Trust For. It trades about 0.26 of its potential returns per unit of risk. Invesco Trust For is currently generating about 0.26 per unit of risk. If you would invest 4,262 in Bank of America on August 28, 2024 and sell it today you would earn a total of 488.00 from holding Bank of America or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Invesco Trust For
Performance |
| Timeline |
| Bank of America |
| Invesco Trust For |
Bank of America and Invesco Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Invesco Trust
The main advantage of trading using opposite Bank of America and Invesco Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Invesco Trust 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 Trust will offset losses from the drop in Invesco Trust's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal | Bank of America vs. Bank of Nova |
| Invesco Trust vs. Pimco New York | Invesco Trust vs. Pimco New York | Invesco Trust vs. BlackRock New York | Invesco Trust vs. Invesco California Value |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |