Correlation Between Aim Investment and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both Aim Investment and Invesco Municipal 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 Aim Investment and Invesco Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aim Investment Securities and Invesco Municipal Income, you can compare the effects of market volatilities on Aim Investment and Invesco Municipal 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 Aim Investment with a short position of Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aim Investment and Invesco Municipal.
Diversification Opportunities for Aim Investment and Invesco Municipal
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aim and Invesco is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Aim Investment Securities and Invesco Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Income and Aim Investment 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 Aim Investment Securities are associated (or correlated) with Invesco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Income has no effect on the direction of Aim Investment i.e., Aim Investment and Invesco Municipal go up and down completely randomly.
Pair Corralation between Aim Investment and Invesco Municipal
Assuming the 90 days horizon Aim Investment Securities is expected to generate 2.29 times more return on investment than Invesco Municipal. However, Aim Investment is 2.29 times more volatile than Invesco Municipal Income. It trades about 0.06 of its potential returns per unit of risk. Invesco Municipal Income is currently generating about 0.11 per unit of risk. If you would invest 1,916 in Aim Investment Securities on September 3, 2024 and sell it today you would earn a total of 96.00 from holding Aim Investment Securities or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aim Investment Securities vs. Invesco Municipal Income
Performance |
| Timeline |
| Aim Investment Securities |
| Invesco Municipal Income |
Aim Investment and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aim Investment and Invesco Municipal
The main advantage of trading using opposite Aim Investment and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aim Investment position performs unexpectedly, Invesco Municipal 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 Municipal will offset losses from the drop in Invesco Municipal's long position.| Aim Investment vs. Blackrock Gbl Alloc | Aim Investment vs. Ivy Asset Strategy | Aim Investment vs. Fpa Crescent Fund | Aim Investment vs. Templeton Global Bond |
| Invesco Municipal vs. Vanguard Long Term Tax Exempt | Invesco Municipal vs. Vanguard High Yield Tax Exempt | Invesco Municipal vs. Franklin Federal Tax Free | Invesco Municipal vs. Franklin Federal Tax Free |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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