Correlation Between Invesco Energy and High Yield
Can any of the company-specific risk be diversified away by investing in both Invesco Energy and High Yield 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 High Yield 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 High Yield Fund, you can compare the effects of market volatilities on Invesco Energy and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Energy and High Yield.
Diversification Opportunities for Invesco Energy and High Yield
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and High is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Energy Fund and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Invesco Energy i.e., Invesco Energy and High Yield go up and down completely randomly.
Pair Corralation between Invesco Energy and High Yield
Assuming the 90 days horizon Invesco Energy is expected to generate 1.21 times less return on investment than High Yield. In addition to that, Invesco Energy is 5.28 times more volatile than High Yield Fund. It trades about 0.03 of its total potential returns per unit of risk. High Yield Fund is currently generating about 0.2 per unit of volatility. If you would invest 736.00 in High Yield Fund on September 15, 2024 and sell it today you would earn a total of 83.00 from holding High Yield Fund or generate 11.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Energy Fund vs. High Yield Fund
Performance |
| Timeline |
| Invesco Energy |
| High Yield Fund |
Invesco Energy and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Energy and High Yield
The main advantage of trading using opposite Invesco Energy and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Energy position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's 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 |
| High Yield vs. Invesco Energy Fund | High Yield vs. Goehring Rozencwajg Resources | High Yield vs. Franklin Natural Resources | High Yield vs. World Energy Fund |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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