Correlation Between Bitcoin and Invesco Income
Can any of the company-specific risk be diversified away by investing in both Bitcoin and Invesco Income 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 Bitcoin and Invesco Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Invesco Income Allocation, you can compare the effects of market volatilities on Bitcoin and Invesco Income 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 Bitcoin with a short position of Invesco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Invesco Income.
Diversification Opportunities for Bitcoin and Invesco Income
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bitcoin and Invesco is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Invesco Income Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Income Allocation and Bitcoin 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 Bitcoin are associated (or correlated) with Invesco Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Income Allocation has no effect on the direction of Bitcoin i.e., Bitcoin and Invesco Income go up and down completely randomly.
Pair Corralation between Bitcoin and Invesco Income
Assuming the 90 days trading horizon Bitcoin is expected to generate 5.41 times more return on investment than Invesco Income. However, Bitcoin is 5.41 times more volatile than Invesco Income Allocation. It trades about 0.17 of its potential returns per unit of risk. Invesco Income Allocation is currently generating about 0.27 per unit of risk. If you would invest 9,813,580 in Bitcoin on November 2, 2024 and sell it today you would earn a total of 671,920 from holding Bitcoin or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Bitcoin vs. Invesco Income Allocation
Performance |
| Timeline |
| Bitcoin |
| Invesco Income Allocation |
Bitcoin and Invesco Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Invesco Income
The main advantage of trading using opposite Bitcoin and Invesco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Invesco Income 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 Income will offset losses from the drop in Invesco Income's long position.The idea behind Bitcoin and Invesco Income Allocation 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.| Invesco Income vs. Walden Smid Cap | Invesco Income vs. Mid Cap Growth Profund | Invesco Income vs. Amg River Road | Invesco Income vs. Great West Loomis Sayles |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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