Correlation Between Invesco High and Farmers
Can any of the company-specific risk be diversified away by investing in both Invesco High and Farmers 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 Farmers 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 Farmers And Merchants, you can compare the effects of market volatilities on Invesco High and Farmers 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 Farmers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and Farmers.
Diversification Opportunities for Invesco High and Farmers
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Farmers is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Income and Farmers And Merchants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers And Merchants 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 Farmers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers And Merchants has no effect on the direction of Invesco High i.e., Invesco High and Farmers go up and down completely randomly.
Pair Corralation between Invesco High and Farmers
Given the investment horizon of 90 days Invesco High is expected to generate 1.05 times less return on investment than Farmers. But when comparing it to its historical volatility, Invesco High Income is 3.13 times less risky than Farmers. It trades about 0.1 of its potential returns per unit of risk. Farmers And Merchants is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 495,953 in Farmers And Merchants on August 26, 2024 and sell it today you would earn a total of 64,547 from holding Farmers And Merchants or generate 13.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.5% |
| Values | Daily Returns |
Invesco High Income vs. Farmers And Merchants
Performance |
| Timeline |
| Invesco High Income |
| Farmers And Merchants |
Invesco High and Farmers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco High and Farmers
The main advantage of trading using opposite Invesco High and Farmers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco High position performs unexpectedly, Farmers 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 Farmers will offset losses from the drop in Farmers' 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 |
| Farmers vs. Invesco High Income | Farmers vs. Blackrock Muniholdings Ny | Farmers vs. MFS Investment Grade | Farmers 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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