Correlation Between Invesco Senior and IShares Convertible
Can any of the company-specific risk be diversified away by investing in both Invesco Senior and IShares Convertible 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 Senior and IShares Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Senior Loan and iShares Convertible Bond, you can compare the effects of market volatilities on Invesco Senior and IShares Convertible 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 Senior with a short position of IShares Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Senior and IShares Convertible.
Diversification Opportunities for Invesco Senior and IShares Convertible
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Invesco and IShares is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Senior Loan and iShares Convertible Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Convertible Bond and Invesco Senior 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 Senior Loan are associated (or correlated) with IShares Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Convertible Bond has no effect on the direction of Invesco Senior i.e., Invesco Senior and IShares Convertible go up and down completely randomly.
Pair Corralation between Invesco Senior and IShares Convertible
Given the investment horizon of 90 days Invesco Senior is expected to generate 19.42 times less return on investment than IShares Convertible. But when comparing it to its historical volatility, Invesco Senior Loan is 5.63 times less risky than IShares Convertible. It trades about 0.08 of its potential returns per unit of risk. iShares Convertible Bond is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 8,544 in iShares Convertible Bond on November 9, 2024 and sell it today you would earn a total of 240.00 from holding iShares Convertible Bond or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Senior Loan vs. iShares Convertible Bond
Performance |
| Timeline |
| Invesco Senior Loan |
| iShares Convertible Bond |
Invesco Senior and IShares Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Senior and IShares Convertible
The main advantage of trading using opposite Invesco Senior and IShares Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Senior position performs unexpectedly, IShares Convertible 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 IShares Convertible will offset losses from the drop in IShares Convertible's long position.| Invesco Senior vs. BondBloxx ETF Trust | Invesco Senior vs. Virtus ETF Trust | Invesco Senior vs. Virtus ETF Trust | Invesco Senior vs. WisdomTree Emerging Markets |
| IShares Convertible vs. BondBloxx ETF Trust | IShares Convertible vs. Virtus ETF Trust | IShares Convertible vs. Virtus ETF Trust | IShares Convertible vs. WisdomTree Emerging Markets |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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