Correlation Between Invesco High and Merrill Lynch
Can any of the company-specific risk be diversified away by investing in both Invesco High and Merrill Lynch 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 Merrill Lynch 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 Merrill Lynch, you can compare the effects of market volatilities on Invesco High and Merrill Lynch 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 Merrill Lynch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and Merrill Lynch.
Diversification Opportunities for Invesco High and Merrill Lynch
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Merrill is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Income and Merrill Lynch in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merrill Lynch 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 Merrill Lynch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merrill Lynch has no effect on the direction of Invesco High i.e., Invesco High and Merrill Lynch go up and down completely randomly.
Pair Corralation between Invesco High and Merrill Lynch
If you would invest 749.00 in Invesco High Income on August 27, 2024 and sell it today you would earn a total of 5.00 from holding Invesco High Income or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Invesco High Income vs. Merrill Lynch
Performance |
| Timeline |
| Invesco High Income |
| Merrill Lynch |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Invesco High and Merrill Lynch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco High and Merrill Lynch
The main advantage of trading using opposite Invesco High and Merrill Lynch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco High position performs unexpectedly, Merrill Lynch 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 Merrill Lynch will offset losses from the drop in Merrill Lynch'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 |
| Merrill Lynch vs. Blackrock Muniholdings Ny | Merrill Lynch vs. MFS Investment Grade | Merrill Lynch vs. Eaton Vance National | Merrill Lynch vs. Invesco 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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