Correlation Between Great Elm and Invesco Trust
Can any of the company-specific risk be diversified away by investing in both Great Elm and Invesco Trust 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 Great Elm and Invesco Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Elm Capital and Invesco Trust For, you can compare the effects of market volatilities on Great Elm and Invesco Trust 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 Great Elm with a short position of Invesco Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Elm and Invesco Trust.
Diversification Opportunities for Great Elm and Invesco Trust
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Great and Invesco is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Great Elm Capital and Invesco Trust For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Trust For and Great Elm 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 Great Elm Capital are associated (or correlated) with Invesco Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Trust For has no effect on the direction of Great Elm i.e., Great Elm and Invesco Trust go up and down completely randomly.
Pair Corralation between Great Elm and Invesco Trust
Given the investment horizon of 90 days Great Elm Capital is expected to generate 1.81 times more return on investment than Invesco Trust. However, Great Elm is 1.81 times more volatile than Invesco Trust For. It trades about 0.16 of its potential returns per unit of risk. Invesco Trust For is currently generating about -0.09 per unit of risk. If you would invest 940.00 in Great Elm Capital on November 1, 2024 and sell it today you would earn a total of 128.00 from holding Great Elm Capital or generate 13.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Elm Capital vs. Invesco Trust For
Performance |
| Timeline |
| Great Elm Capital |
| Invesco Trust For |
Great Elm and Invesco Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Elm and Invesco Trust
The main advantage of trading using opposite Great Elm and Invesco Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Elm position performs unexpectedly, Invesco Trust 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 Trust will offset losses from the drop in Invesco Trust's long position.| Great Elm vs. Blue Owl Capital | Great Elm vs. TPG Inc | Great Elm vs. Patria Investments | Great Elm vs. Cion Investment Corp |
| Invesco Trust vs. Pimco New York | Invesco Trust vs. Pimco New York | Invesco Trust vs. BlackRock New York | Invesco Trust vs. Invesco California Value |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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