Correlation Between Invesco Emerging and Aim International
Can any of the company-specific risk be diversified away by investing in both Invesco Emerging 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 Emerging 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 Emerging Markets and Aim International Mutual, you can compare the effects of market volatilities on Invesco Emerging 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 Emerging with a short position of Aim International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Emerging and Aim International.
Diversification Opportunities for Invesco Emerging and Aim International
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Aim is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Emerging Markets 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 Emerging 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 Emerging Markets 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 Emerging i.e., Invesco Emerging and Aim International go up and down completely randomly.
Pair Corralation between Invesco Emerging and Aim International
Assuming the 90 days horizon Invesco Emerging Markets is expected to generate 0.5 times more return on investment than Aim International. However, Invesco Emerging Markets is 2.01 times less risky than Aim International. It trades about 0.05 of its potential returns per unit of risk. Aim International Mutual is currently generating about 0.0 per unit of risk. If you would invest 467.00 in Invesco Emerging Markets on November 9, 2024 and sell it today you would earn a total of 50.00 from holding Invesco Emerging Markets or generate 10.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Invesco Emerging Markets vs. Aim International Mutual
Performance |
| Timeline |
| Invesco Emerging Markets |
| Aim International Mutual |
Invesco Emerging and Aim International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Emerging and Aim International
The main advantage of trading using opposite Invesco Emerging and Aim International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Emerging 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 Emerging vs. Firsthand Alternative Energy | Invesco Emerging vs. Ivy Natural Resources | Invesco Emerging vs. Invesco Energy Fund | Invesco Emerging vs. Fidelity Advisor Energy |
| Aim International vs. Tekla Healthcare Investors | Aim International vs. Hartford Healthcare Hls | Aim International vs. Eaton Vance Worldwide | Aim International vs. Health Care Ultrasector |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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