Correlation Between China Health and Invesco High
Can any of the company-specific risk be diversified away by investing in both China Health and Invesco High 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 Health and Invesco High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Health Management and Invesco High Income, you can compare the effects of market volatilities on China Health and Invesco High 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 Health with a short position of Invesco High. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and Invesco High.
Diversification Opportunities for China Health and Invesco High
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Invesco is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding China Health Management and Invesco High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco High Income and China Health 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 Health Management are associated (or correlated) with Invesco High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco High Income has no effect on the direction of China Health i.e., China Health and Invesco High go up and down completely randomly.
Pair Corralation between China Health and Invesco High
Given the investment horizon of 90 days China Health Management is expected to under-perform the Invesco High. In addition to that, China Health is 15.47 times more volatile than Invesco High Income. It trades about -0.14 of its total potential returns per unit of risk. Invesco High Income is currently generating about 0.16 per unit of volatility. If you would invest 1,119 in Invesco High Income on September 1, 2024 and sell it today you would earn a total of 19.00 from holding Invesco High Income or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Health Management vs. Invesco High Income
Performance |
| Timeline |
| China Health Management |
| Invesco High Income |
China Health and Invesco High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Health and Invesco High
The main advantage of trading using opposite China Health and Invesco High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Health position performs unexpectedly, Invesco High 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 High will offset losses from the drop in Invesco High's long position.| China Health vs. Absolute Health and | China Health vs. Embrace Change Acquisition | China Health vs. Supurva Healthcare Group | China Health vs. TransAKT |
| Invesco High vs. China Health Management | Invesco High vs. Absolute Health and | Invesco High vs. Supurva Healthcare Group | Invesco High vs. TransAKT |
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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