Correlation Between Invesco Energy and International Investors
Can any of the company-specific risk be diversified away by investing in both Invesco Energy and International Investors 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 International Investors 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 International Investors Gold, you can compare the effects of market volatilities on Invesco Energy and International Investors 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 International Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Energy and International Investors.
Diversification Opportunities for Invesco Energy and International Investors
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and International is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Energy Fund and International Investors Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Investors 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 International Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Investors has no effect on the direction of Invesco Energy i.e., Invesco Energy and International Investors go up and down completely randomly.
Pair Corralation between Invesco Energy and International Investors
Assuming the 90 days horizon Invesco Energy Fund is expected to under-perform the International Investors. But the mutual fund apears to be less risky and, when comparing its historical volatility, Invesco Energy Fund is 2.12 times less risky than International Investors. The mutual fund trades about -0.18 of its potential returns per unit of risk. The International Investors Gold is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 923.00 in International Investors Gold on September 15, 2024 and sell it today you would earn a total of 37.00 from holding International Investors Gold or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Invesco Energy Fund vs. International Investors Gold
Performance |
| Timeline |
| Invesco Energy |
| International Investors |
Invesco Energy and International Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Energy and International Investors
The main advantage of trading using opposite Invesco Energy and International Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Energy position performs unexpectedly, International Investors 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 International Investors will offset losses from the drop in International Investors' long position.| Invesco Energy vs. Arrow Managed Futures | Invesco Energy vs. Falcon Focus Scv | Invesco Energy vs. Western Asset Municipal | Invesco Energy vs. Leggmason Partners Institutional |
| International Investors vs. Invesco Energy Fund | International Investors vs. Dreyfus Natural Resources | International Investors vs. Hennessy Bp Energy | International Investors vs. Short Oil Gas |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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