Correlation Between Fidelity Preferred and Invesco Senior
Can any of the company-specific risk be diversified away by investing in both Fidelity Preferred and Invesco Senior 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 Fidelity Preferred and Invesco Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Preferred Securities and Invesco Senior Loan, you can compare the effects of market volatilities on Fidelity Preferred and Invesco Senior 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 Fidelity Preferred with a short position of Invesco Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Preferred and Invesco Senior.
Diversification Opportunities for Fidelity Preferred and Invesco Senior
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fidelity and Invesco is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Preferred Securities and Invesco Senior Loan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Senior Loan and Fidelity Preferred 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 Fidelity Preferred Securities are associated (or correlated) with Invesco Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Senior Loan has no effect on the direction of Fidelity Preferred i.e., Fidelity Preferred and Invesco Senior go up and down completely randomly.
Pair Corralation between Fidelity Preferred and Invesco Senior
Given the investment horizon of 90 days Fidelity Preferred Securities is expected to generate 1.34 times more return on investment than Invesco Senior. However, Fidelity Preferred is 1.34 times more volatile than Invesco Senior Loan. It trades about 0.16 of its potential returns per unit of risk. Invesco Senior Loan is currently generating about 0.2 per unit of risk. If you would invest 2,097 in Fidelity Preferred Securities on August 30, 2024 and sell it today you would earn a total of 96.00 from holding Fidelity Preferred Securities or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Preferred Securities vs. Invesco Senior Loan
Performance |
| Timeline |
| Fidelity Preferred |
| Invesco Senior Loan |
Fidelity Preferred and Invesco Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Preferred and Invesco Senior
The main advantage of trading using opposite Fidelity Preferred and Invesco Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Preferred position performs unexpectedly, Invesco Senior 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 Senior will offset losses from the drop in Invesco Senior's long position.| Fidelity Preferred vs. Fidelity Investment Grade | Fidelity Preferred vs. Fidelity Investment Grade | Fidelity Preferred vs. Fidelity High Yield | Fidelity Preferred vs. Fidelity Corporate Bond |
| Invesco Senior vs. Franklin Liberty High | Invesco Senior vs. First Trust Senior | Invesco Senior vs. Franklin Liberty International | Invesco Senior vs. Franklin Liberty Short |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |