Correlation Between Invesco Global and Northern Funds
Can any of the company-specific risk be diversified away by investing in both Invesco Global and Northern Funds 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 Global and Northern Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Global Health and Northern Funds , you can compare the effects of market volatilities on Invesco Global and Northern Funds 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 Global with a short position of Northern Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Global and Northern Funds.
Diversification Opportunities for Invesco Global and Northern Funds
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invesco and Northern is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Global Health and Northern Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Funds and Invesco Global 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 Global Health are associated (or correlated) with Northern Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Funds has no effect on the direction of Invesco Global i.e., Invesco Global and Northern Funds go up and down completely randomly.
Pair Corralation between Invesco Global and Northern Funds
Assuming the 90 days horizon Invesco Global Health is expected to generate 2.44 times more return on investment than Northern Funds. However, Invesco Global is 2.44 times more volatile than Northern Funds . It trades about 0.06 of its potential returns per unit of risk. Northern Funds is currently generating about 0.06 per unit of risk. If you would invest 3,681 in Invesco Global Health on September 14, 2024 and sell it today you would earn a total of 378.00 from holding Invesco Global Health or generate 10.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
Invesco Global Health vs. Northern Funds
Performance |
| Timeline |
| Invesco Global Health |
| Northern Funds |
Invesco Global and Northern Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Global and Northern Funds
The main advantage of trading using opposite Invesco Global and Northern Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Global position performs unexpectedly, Northern Funds 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 Northern Funds will offset losses from the drop in Northern Funds' long position.| Invesco Global vs. Qs Large Cap | Invesco Global vs. Aqr Large Cap | Invesco Global vs. Dodge Cox Stock | Invesco Global vs. Dunham Large Cap |
| Northern Funds vs. Inverse High Yield | Northern Funds vs. Prudential High Yield | Northern Funds vs. City National Rochdale | Northern Funds vs. Jpmorgan High Yield |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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