Correlation Between Arrowmark Financial and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both Arrowmark Financial 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 Arrowmark Financial and Invesco Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrowmark Financial Corp and Invesco Municipal Trust, you can compare the effects of market volatilities on Arrowmark Financial 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 Arrowmark Financial with a short position of Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrowmark Financial and Invesco Municipal.
Diversification Opportunities for Arrowmark Financial and Invesco Municipal
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arrowmark and Invesco is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Arrowmark Financial Corp 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 Arrowmark Financial 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 Arrowmark Financial Corp 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 Arrowmark Financial i.e., Arrowmark Financial and Invesco Municipal go up and down completely randomly.
Pair Corralation between Arrowmark Financial and Invesco Municipal
Given the investment horizon of 90 days Arrowmark Financial Corp is expected to under-perform the Invesco Municipal. In addition to that, Arrowmark Financial is 1.6 times more volatile than Invesco Municipal Trust. It trades about 0.0 of its total potential returns per unit of risk. Invesco Municipal Trust is currently generating about 0.18 per unit of volatility. If you would invest 1,001 in Invesco Municipal Trust on September 2, 2024 and sell it today you would earn a total of 28.00 from holding Invesco Municipal Trust or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrowmark Financial Corp vs. Invesco Municipal Trust
Performance |
| Timeline |
| Arrowmark Financial Corp |
| Invesco Municipal Trust |
Arrowmark Financial and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrowmark Financial and Invesco Municipal
The main advantage of trading using opposite Arrowmark Financial and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrowmark Financial 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.| Arrowmark Financial vs. Brookfield Business Corp | Arrowmark Financial vs. Elysee Development Corp | Arrowmark Financial vs. DWS Municipal Income | Arrowmark Financial vs. Blackrock Munivest |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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