Correlation Between Invesco High and Highland Floating
Can any of the company-specific risk be diversified away by investing in both Invesco High and Highland Floating 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 Highland Floating 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 Highland Floating Rate, you can compare the effects of market volatilities on Invesco High and Highland Floating 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 Highland Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and Highland Floating.
Diversification Opportunities for Invesco High and Highland Floating
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invesco and Highland is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Income and Highland Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Floating Rate 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 Highland Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Floating Rate has no effect on the direction of Invesco High i.e., Invesco High and Highland Floating go up and down completely randomly.
Pair Corralation between Invesco High and Highland Floating
Given the investment horizon of 90 days Invesco High is expected to generate 9.81 times less return on investment than Highland Floating. But when comparing it to its historical volatility, Invesco High Income is 21.35 times less risky than Highland Floating. It trades about 0.23 of its potential returns per unit of risk. Highland Floating Rate is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 561.00 in Highland Floating Rate on August 30, 2024 and sell it today you would earn a total of 27.00 from holding Highland Floating Rate or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco High Income vs. Highland Floating Rate
Performance |
| Timeline |
| Invesco High Income |
| Highland Floating Rate |
Invesco High and Highland Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco High and Highland Floating
The main advantage of trading using opposite Invesco High and Highland Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco High position performs unexpectedly, Highland Floating 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 Highland Floating will offset losses from the drop in Highland Floating'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 |
| Highland Floating vs. Gabelli Global Small | Highland Floating vs. MFS Investment Grade | Highland Floating vs. Eaton Vance National | Highland Floating vs. GAMCO Natural Resources |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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