Correlation Between Invesco European and Invesco International
Can any of the company-specific risk be diversified away by investing in both Invesco European and Invesco 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 European and Invesco International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco European Small and Invesco International Small, you can compare the effects of market volatilities on Invesco European and Invesco 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 European with a short position of Invesco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco European and Invesco International.
Diversification Opportunities for Invesco European and Invesco International
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Invesco is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Invesco European Small and Invesco International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco International and Invesco European 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 European Small are associated (or correlated) with Invesco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco International has no effect on the direction of Invesco European i.e., Invesco European and Invesco International go up and down completely randomly.
Pair Corralation between Invesco European and Invesco International
Assuming the 90 days horizon Invesco European Small is expected to generate 1.33 times more return on investment than Invesco International. However, Invesco European is 1.33 times more volatile than Invesco International Small. It trades about -0.06 of its potential returns per unit of risk. Invesco International Small is currently generating about -0.1 per unit of risk. If you would invest 1,451 in Invesco European Small on September 1, 2024 and sell it today you would lose (16.00) from holding Invesco European Small or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Invesco European Small vs. Invesco International Small
Performance |
| Timeline |
| Invesco European Small |
| Invesco International |
Invesco European and Invesco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco European and Invesco International
The main advantage of trading using opposite Invesco European and Invesco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco European position performs unexpectedly, Invesco 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 Invesco International will offset losses from the drop in Invesco International's long position.| Invesco European vs. Invesco Municipal Income | Invesco European vs. Invesco Municipal Income | Invesco European vs. Invesco Municipal Income | Invesco European vs. Oppenheimer Rising Dividends |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |