Correlation Between Invesco Energy and Catalystmillburn
Can any of the company-specific risk be diversified away by investing in both Invesco Energy and Catalystmillburn 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 Catalystmillburn 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 Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Invesco Energy and Catalystmillburn 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 Catalystmillburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Energy and Catalystmillburn.
Diversification Opportunities for Invesco Energy and Catalystmillburn
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Catalystmillburn is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Energy Fund and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge 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 Catalystmillburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Invesco Energy i.e., Invesco Energy and Catalystmillburn go up and down completely randomly.
Pair Corralation between Invesco Energy and Catalystmillburn
Assuming the 90 days horizon Invesco Energy Fund is expected to under-perform the Catalystmillburn. In addition to that, Invesco Energy is 2.9 times more volatile than Catalystmillburn Hedge Strategy. It trades about -0.08 of its total potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.15 per unit of volatility. If you would invest 3,974 in Catalystmillburn Hedge Strategy on September 13, 2024 and sell it today you would earn a total of 38.00 from holding Catalystmillburn Hedge Strategy or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Energy Fund vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Invesco Energy |
| Catalystmillburn Hedge |
Invesco Energy and Catalystmillburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Energy and Catalystmillburn
The main advantage of trading using opposite Invesco Energy and Catalystmillburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Energy position performs unexpectedly, Catalystmillburn 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 Catalystmillburn will offset losses from the drop in Catalystmillburn's long position.| Invesco Energy vs. Us Government Securities | Invesco Energy vs. Payden Government Fund | Invesco Energy vs. Intermediate Government Bond | Invesco Energy vs. Prudential Government Income |
| Catalystmillburn vs. Energy Basic Materials | Catalystmillburn vs. Franklin Natural Resources | Catalystmillburn vs. Invesco Energy Fund | Catalystmillburn vs. Gmo Resources |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
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