Correlation Between Invesco AT1 and Invesco EURO
Can any of the company-specific risk be diversified away by investing in both Invesco AT1 and Invesco EURO 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 AT1 and Invesco EURO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco AT1 Capital and Invesco EURO STOXX, you can compare the effects of market volatilities on Invesco AT1 and Invesco EURO 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 AT1 with a short position of Invesco EURO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco AT1 and Invesco EURO.
Diversification Opportunities for Invesco AT1 and Invesco EURO
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Invesco is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Invesco AT1 Capital and Invesco EURO STOXX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco EURO STOXX and Invesco AT1 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 AT1 Capital are associated (or correlated) with Invesco EURO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco EURO STOXX has no effect on the direction of Invesco AT1 i.e., Invesco AT1 and Invesco EURO go up and down completely randomly.
Pair Corralation between Invesco AT1 and Invesco EURO
Assuming the 90 days trading horizon Invesco AT1 is expected to generate 4.36 times less return on investment than Invesco EURO. But when comparing it to its historical volatility, Invesco AT1 Capital is 2.18 times less risky than Invesco EURO. It trades about 0.04 of its potential returns per unit of risk. Invesco EURO STOXX is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6,086 in Invesco EURO STOXX on September 3, 2024 and sell it today you would earn a total of 3,978 from holding Invesco EURO STOXX or generate 65.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Invesco AT1 Capital vs. Invesco EURO STOXX
Performance |
| Timeline |
| Invesco AT1 Capital |
| Invesco EURO STOXX |
Invesco AT1 and Invesco EURO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco AT1 and Invesco EURO
The main advantage of trading using opposite Invesco AT1 and Invesco EURO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco AT1 position performs unexpectedly, Invesco EURO 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 EURO will offset losses from the drop in Invesco EURO's long position.| Invesco AT1 vs. Invesco EURO STOXX | Invesco AT1 vs. Invesco AT1 Capital | Invesco AT1 vs. Invesco Treasury Bond | Invesco AT1 vs. Invesco CoinShares Global |
| Invesco EURO vs. Invesco AT1 Capital | Invesco EURO vs. Invesco AT1 Capital | Invesco EURO vs. Invesco Treasury Bond | Invesco EURO vs. Invesco CoinShares Global |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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