Correlation Between Invesco Discovery and Aim International
Can any of the company-specific risk be diversified away by investing in both Invesco Discovery 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 Discovery 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 Discovery and Aim International Mutual, you can compare the effects of market volatilities on Invesco Discovery 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 Discovery with a short position of Aim International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Discovery and Aim International.
Diversification Opportunities for Invesco Discovery and Aim International
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invesco and Aim is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Discovery 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 Discovery 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 Discovery 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 Discovery i.e., Invesco Discovery and Aim International go up and down completely randomly.
Pair Corralation between Invesco Discovery and Aim International
Assuming the 90 days horizon Invesco Discovery is expected to generate 1.39 times more return on investment than Aim International. However, Invesco Discovery is 1.39 times more volatile than Aim International Mutual. It trades about 0.07 of its potential returns per unit of risk. Aim International Mutual is currently generating about 0.01 per unit of risk. If you would invest 7,651 in Invesco Discovery on August 24, 2024 and sell it today you would earn a total of 3,595 from holding Invesco Discovery or generate 46.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Discovery vs. Aim International Mutual
Performance |
| Timeline |
| Invesco Discovery |
| Aim International Mutual |
Invesco Discovery and Aim International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Discovery and Aim International
The main advantage of trading using opposite Invesco Discovery and Aim International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Discovery 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.| Invesco Discovery vs. Short Oil Gas | Invesco Discovery vs. Gamco Natural Resources | Invesco Discovery vs. Energy Basic Materials | Invesco Discovery vs. Dreyfus Natural Resources |
| Aim International vs. Tortoise Energy Independence | Aim International vs. Hennessy Bp Energy | Aim International vs. Gamco Natural Resources | Aim International vs. Gmo Resources |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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