Correlation Between Invesco High and Canadian Western
Can any of the company-specific risk be diversified away by investing in both Invesco High and Canadian Western 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 Canadian Western 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 Canadian Western Bank, you can compare the effects of market volatilities on Invesco High and Canadian Western 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 Canadian Western. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and Canadian Western.
Diversification Opportunities for Invesco High and Canadian Western
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Canadian is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Income and Canadian Western Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Western Bank 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 Canadian Western. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Western Bank has no effect on the direction of Invesco High i.e., Invesco High and Canadian Western go up and down completely randomly.
Pair Corralation between Invesco High and Canadian Western
Given the investment horizon of 90 days Invesco High is expected to generate 6.03 times less return on investment than Canadian Western. But when comparing it to its historical volatility, Invesco High Income is 5.68 times less risky than Canadian Western. It trades about 0.29 of its potential returns per unit of risk. Canadian Western Bank is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 4,096 in Canadian Western Bank on August 27, 2024 and sell it today you would earn a total of 166.00 from holding Canadian Western Bank or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco High Income vs. Canadian Western Bank
Performance |
| Timeline |
| Invesco High Income |
| Canadian Western Bank |
Invesco High and Canadian Western Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco High and Canadian Western
The main advantage of trading using opposite Invesco High and Canadian Western positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco High position performs unexpectedly, Canadian Western 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 Canadian Western will offset losses from the drop in Canadian Western's 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 |
| Canadian Western vs. Invesco High Income | Canadian Western vs. Blackrock Muniholdings Ny | Canadian Western vs. MFS Investment Grade | Canadian Western vs. Federated Premier Municipal |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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