Correlation Between Invesco Energy and Franklin
Can any of the company-specific risk be diversified away by investing in both Invesco Energy and Franklin 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 Energy and Franklin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Energy Fund and Franklin Government Money, you can compare the effects of market volatilities on Invesco Energy and Franklin 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 Energy with a short position of Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Energy and Franklin.
Diversification Opportunities for Invesco Energy and Franklin
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Invesco and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Energy Fund and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money and Invesco Energy 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 Energy Fund are associated (or correlated) with Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Invesco Energy i.e., Invesco Energy and Franklin go up and down completely randomly.
Pair Corralation between Invesco Energy and Franklin
Assuming the 90 days horizon Invesco Energy Fund is expected to generate 9.3 times more return on investment than Franklin. However, Invesco Energy is 9.3 times more volatile than Franklin Government Money. It trades about 0.04 of its potential returns per unit of risk. Franklin Government Money is currently generating about 0.11 per unit of risk. If you would invest 2,196 in Invesco Energy Fund on November 3, 2024 and sell it today you would earn a total of 223.00 from holding Invesco Energy Fund or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Energy Fund vs. Franklin Government Money
Performance |
| Timeline |
| Invesco Energy |
| Franklin Government Money |
Invesco Energy and Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Energy and Franklin
The main advantage of trading using opposite Invesco Energy and Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Energy position performs unexpectedly, Franklin 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 Franklin will offset losses from the drop in Franklin's long position.| Invesco Energy vs. Great West Government Mortgage | Invesco Energy vs. Us Government Securities | Invesco Energy vs. Prudential Government Money | Invesco Energy vs. Dws Government Money |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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