Correlation Between General Money and Invesco International
Can any of the company-specific risk be diversified away by investing in both General Money and Invesco International 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 General Money and Invesco International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Money Market and Invesco International Growth, you can compare the effects of market volatilities on General Money and Invesco International 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 General Money with a short position of Invesco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Money and Invesco International.
Diversification Opportunities for General Money and Invesco International
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between General and Invesco is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding General Money Market and Invesco International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco International and General Money 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 General Money Market are associated (or correlated) with Invesco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco International has no effect on the direction of General Money i.e., General Money and Invesco International go up and down completely randomly.
Pair Corralation between General Money and Invesco International
Assuming the 90 days horizon General Money is expected to generate 2.16 times less return on investment than Invesco International. But when comparing it to its historical volatility, General Money Market is 3.26 times less risky than Invesco International. It trades about 0.06 of its potential returns per unit of risk. Invesco International Growth is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,185 in Invesco International Growth on September 4, 2024 and sell it today you would earn a total of 181.00 from holding Invesco International Growth or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.02% |
| Values | Daily Returns |
General Money Market vs. Invesco International Growth
Performance |
| Timeline |
| General Money Market |
| Invesco International |
General Money and Invesco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Money and Invesco International
The main advantage of trading using opposite General Money and Invesco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Money position performs unexpectedly, Invesco International 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 International will offset losses from the drop in Invesco International's long position.| General Money vs. Vanguard Total Stock | General Money vs. Vanguard 500 Index | General Money vs. Vanguard Total Stock | General Money vs. Vanguard Total Stock |
| Invesco International vs. Matson Money Equity | Invesco International vs. Lord Abbett Emerging | Invesco International vs. Blackrock Exchange Portfolio | Invesco International vs. General Money Market |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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