Correlation Between Invesco Energy and Gmo High
Can any of the company-specific risk be diversified away by investing in both Invesco Energy and Gmo High 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 Gmo High 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 Gmo High Yield, you can compare the effects of market volatilities on Invesco Energy and Gmo High 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 Gmo High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Energy and Gmo High.
Diversification Opportunities for Invesco Energy and Gmo High
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Gmo is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Energy Fund and Gmo High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo High Yield 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 Gmo High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo High Yield has no effect on the direction of Invesco Energy i.e., Invesco Energy and Gmo High go up and down completely randomly.
Pair Corralation between Invesco Energy and Gmo High
Assuming the 90 days horizon Invesco Energy Fund is expected to generate 5.0 times more return on investment than Gmo High. However, Invesco Energy is 5.0 times more volatile than Gmo High Yield. It trades about 0.25 of its potential returns per unit of risk. Gmo High Yield is currently generating about 0.37 per unit of risk. If you would invest 3,048 in Invesco Energy Fund on September 5, 2024 and sell it today you would earn a total of 141.00 from holding Invesco Energy Fund or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Invesco Energy Fund vs. Gmo High Yield
Performance |
| Timeline |
| Invesco Energy |
| Gmo High Yield |
Invesco Energy and Gmo High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Energy and Gmo High
The main advantage of trading using opposite Invesco Energy and Gmo High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Energy position performs unexpectedly, Gmo High 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 Gmo High will offset losses from the drop in Gmo High's long position.| Invesco Energy vs. Gmo High Yield | Invesco Energy vs. Siit High Yield | Invesco Energy vs. Guggenheim High Yield | Invesco Energy vs. Artisan High Income |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |