Correlation Between Invesco High and Aim Investment
Can any of the company-specific risk be diversified away by investing in both Invesco High and Aim Investment 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 High and Aim Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco High Yield and Aim Investment Securities, you can compare the effects of market volatilities on Invesco High and Aim Investment 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 High with a short position of Aim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and Aim Investment.
Diversification Opportunities for Invesco High and Aim Investment
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Aim is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Yield and Aim Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Investment Securities and Invesco High 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 High Yield are associated (or correlated) with Aim Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim Investment Securities has no effect on the direction of Invesco High i.e., Invesco High and Aim Investment go up and down completely randomly.
Pair Corralation between Invesco High and Aim Investment
Assuming the 90 days horizon Invesco High Yield is expected to generate 1.19 times more return on investment than Aim Investment. However, Invesco High is 1.19 times more volatile than Aim Investment Securities. It trades about 0.1 of its potential returns per unit of risk. Aim Investment Securities is currently generating about 0.03 per unit of risk. If you would invest 307.00 in Invesco High Yield on September 3, 2024 and sell it today you would earn a total of 52.00 from holding Invesco High Yield or generate 16.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco High Yield vs. Aim Investment Securities
Performance |
| Timeline |
| Invesco High Yield |
| Aim Investment Securities |
Invesco High and Aim Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco High and Aim Investment
The main advantage of trading using opposite Invesco High and Aim Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco High position performs unexpectedly, Aim Investment 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 Aim Investment will offset losses from the drop in Aim Investment's long position.| Invesco High vs. Vanguard Financials Index | Invesco High vs. Fidelity Advisor Financial | Invesco High vs. Prudential Jennison Financial | Invesco High vs. Transamerica Financial Life |
| Aim Investment vs. Virtus Convertible | Aim Investment vs. Calamos Dynamic Convertible | Aim Investment vs. Putnam Convertible Incm Gwth | Aim Investment vs. Lord Abbett Convertible |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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