Correlation Between First Northern and Invesco High
Can any of the company-specific risk be diversified away by investing in both First Northern 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 First Northern and Invesco High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Northern Community and Invesco High Income, you can compare the effects of market volatilities on First Northern 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 First Northern with a short position of Invesco High. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Northern and Invesco High.
Diversification Opportunities for First Northern and Invesco High
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Invesco is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding First Northern Community 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 First Northern 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 First Northern Community 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 First Northern i.e., First Northern and Invesco High go up and down completely randomly.
Pair Corralation between First Northern and Invesco High
Given the investment horizon of 90 days First Northern is expected to generate 1.16 times less return on investment than Invesco High. In addition to that, First Northern is 7.76 times more volatile than Invesco High Income. It trades about 0.03 of its total potential returns per unit of risk. Invesco High Income is currently generating about 0.28 per unit of volatility. If you would invest 749.00 in Invesco High Income on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Invesco High Income or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Northern Community vs. Invesco High Income
Performance |
| Timeline |
| First Northern Community |
| Invesco High Income |
First Northern and Invesco High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Northern and Invesco High
The main advantage of trading using opposite First Northern and Invesco High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Northern 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.| First Northern vs. Invesco High Income | First Northern vs. Blackrock Muniholdings Ny | First Northern vs. Nuveen California Select | First Northern vs. MFS Investment Grade |
| Invesco High vs. MFS Investment Grade | Invesco High vs. Eaton Vance National | Invesco High vs. Nuveen California Select | Invesco High vs. Federated Premier Municipal |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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