Correlation Between Invesco Balanced-risk and Aim International

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

Diversification Opportunities for Invesco Balanced-risk and Aim International

InvescoAimDiversified AwayInvescoAimDiversified Away100%
0.38
  Correlation Coefficient

Weak diversification

The 3 months correlation between Invesco and Aim is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Balanced Risk Modity and Aim International Mutual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim International Mutual and Invesco Balanced-risk 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 Balanced Risk Modity are associated (or correlated) with Aim International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim International Mutual has no effect on the direction of Invesco Balanced-risk i.e., Invesco Balanced-risk and Aim International go up and down completely randomly.

Pair Corralation between Invesco Balanced-risk and Aim International

Assuming the 90 days horizon Invesco Balanced Risk Modity is expected to generate 0.73 times more return on investment than Aim International. However, Invesco Balanced Risk Modity is 1.38 times less risky than Aim International. It trades about 0.17 of its potential returns per unit of risk. Aim International Mutual is currently generating about 0.12 per unit of risk. If you would invest  636.00  in Invesco Balanced Risk Modity on November 25, 2024 and sell it today you would earn a total of  13.00  from holding Invesco Balanced Risk Modity or generate 2.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Invesco Balanced Risk Modity  vs.  Aim International Mutual

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-505
JavaScript chart by amCharts 3.21.15BRCRX INSLX
       Timeline  
Invesco Balanced Risk 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Balanced Risk Modity are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Invesco Balanced-risk is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6.16.26.36.46.5
Aim International Mutual 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Aim International Mutual has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Aim International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb36373839404142

Invesco Balanced-risk and Aim International Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.11-1.56-1.01-0.460.05580.591.141.692.24 0.20.40.60.8
JavaScript chart by amCharts 3.21.15BRCRX INSLX
       Returns  

Pair Trading with Invesco Balanced-risk and Aim International

The main advantage of trading using opposite Invesco Balanced-risk and Aim International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Balanced-risk position performs unexpectedly, Aim International 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 Aim International will offset losses from the drop in Aim International's long position.
The idea behind Invesco Balanced Risk Modity and Aim International Mutual 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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