Correlation Between Invesco High and Franklin Credit
Can any of the company-specific risk be diversified away by investing in both Invesco High and Franklin Credit 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 Franklin Credit 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 Franklin Credit Management, you can compare the effects of market volatilities on Invesco High and Franklin Credit 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 Franklin Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and Franklin Credit.
Diversification Opportunities for Invesco High and Franklin Credit
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Franklin is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Income and Franklin Credit Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Credit Mana 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 Franklin Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Credit Mana has no effect on the direction of Invesco High i.e., Invesco High and Franklin Credit go up and down completely randomly.
Pair Corralation between Invesco High and Franklin Credit
Given the investment horizon of 90 days Invesco High is expected to generate 3.68 times less return on investment than Franklin Credit. But when comparing it to its historical volatility, Invesco High Income is 11.09 times less risky than Franklin Credit. It trades about 0.17 of its potential returns per unit of risk. Franklin Credit Management is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Franklin Credit Management on August 25, 2024 and sell it today you would earn a total of 1.00 from holding Franklin Credit Management or generate 10.0% 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. Franklin Credit Management
Performance |
| Timeline |
| Invesco High Income |
| Franklin Credit Mana |
Invesco High and Franklin Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco High and Franklin Credit
The main advantage of trading using opposite Invesco High and Franklin Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco High position performs unexpectedly, Franklin Credit 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 Franklin Credit will offset losses from the drop in Franklin Credit'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 |
| Franklin Credit vs. Invesco High Income | Franklin Credit vs. Blackrock Muniholdings Ny | Franklin Credit vs. MFS Investment Grade | Franklin Credit 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Stocks Directory Find actively traded stocks across global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |