Correlation Between China Fund and Invesco Senior
Can any of the company-specific risk be diversified away by investing in both China Fund and Invesco Senior 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 China Fund and Invesco Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Fund and Invesco Senior Income, you can compare the effects of market volatilities on China Fund and Invesco Senior 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 China Fund with a short position of Invesco Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Fund and Invesco Senior.
Diversification Opportunities for China Fund and Invesco Senior
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Invesco is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding China Fund and Invesco Senior Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Senior Income and China Fund 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 China Fund are associated (or correlated) with Invesco Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Senior Income has no effect on the direction of China Fund i.e., China Fund and Invesco Senior go up and down completely randomly.
Pair Corralation between China Fund and Invesco Senior
Considering the 90-day investment horizon China Fund is expected to under-perform the Invesco Senior. In addition to that, China Fund is 3.57 times more volatile than Invesco Senior Income. It trades about -0.19 of its total potential returns per unit of risk. Invesco Senior Income is currently generating about 0.12 per unit of volatility. If you would invest 384.00 in Invesco Senior Income on August 27, 2024 and sell it today you would earn a total of 6.00 from holding Invesco Senior Income or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Fund vs. Invesco Senior Income
Performance |
| Timeline |
| China Fund |
| Invesco Senior Income |
China Fund and Invesco Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Fund and Invesco Senior
The main advantage of trading using opposite China Fund and Invesco Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Fund position performs unexpectedly, Invesco Senior 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 Senior will offset losses from the drop in Invesco Senior's long position.| China Fund vs. Ashmore Group Plc | China Fund vs. Mexico Equity And | China Fund vs. Western Asset Managed | China Fund vs. Blackrock Muniholdings Quality |
| Invesco Senior vs. Nuveen Floating Rate | Invesco Senior vs. Blackrock Muni Intermediate | Invesco Senior vs. Eaton Vance Senior | Invesco Senior vs. BlackRock Floating Rate |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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