Correlation Between Invesco High and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Invesco High and BNP Paribas 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 High and BNP Paribas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco High Income and BNP Paribas SA, you can compare the effects of market volatilities on Invesco High and BNP Paribas 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 High with a short position of BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and BNP Paribas.
Diversification Opportunities for Invesco High and BNP Paribas
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invesco and BNP is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Income and BNP Paribas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas SA and Invesco High 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 High Income are associated (or correlated) with BNP Paribas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNP Paribas SA has no effect on the direction of Invesco High i.e., Invesco High and BNP Paribas go up and down completely randomly.
Pair Corralation between Invesco High and BNP Paribas
Given the investment horizon of 90 days Invesco High Income is expected to generate 0.07 times more return on investment than BNP Paribas. However, Invesco High Income is 15.21 times less risky than BNP Paribas. It trades about 0.23 of its potential returns per unit of risk. BNP Paribas SA is currently generating about -0.53 per unit of risk. If you would invest 750.00 in Invesco High Income on August 31, 2024 and sell it today you would earn a total of 4.00 from holding Invesco High Income or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco High Income vs. BNP Paribas SA
Performance |
| Timeline |
| Invesco High Income |
| BNP Paribas SA |
Invesco High and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco High and BNP Paribas
The main advantage of trading using opposite Invesco High and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco High position performs unexpectedly, BNP Paribas 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 BNP Paribas will offset losses from the drop in BNP Paribas' long position.| Invesco High vs. MFS Investment Grade | Invesco High vs. Eaton Vance National | Invesco High vs. Nuveen California Select | Invesco High vs. Federated Premier Municipal |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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