Correlation Between Invesco High and Barclays Capital
Can any of the company-specific risk be diversified away by investing in both Invesco High and Barclays Capital 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 Barclays Capital 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 Barclays Capital, you can compare the effects of market volatilities on Invesco High and Barclays Capital 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 Barclays Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and Barclays Capital.
Diversification Opportunities for Invesco High and Barclays Capital
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and Barclays is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Income and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital 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 Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of Invesco High i.e., Invesco High and Barclays Capital go up and down completely randomly.
Pair Corralation between Invesco High and Barclays Capital
Given the investment horizon of 90 days Invesco High is expected to generate 7.63 times less return on investment than Barclays Capital. But when comparing it to its historical volatility, Invesco High Income is 3.22 times less risky than Barclays Capital. It trades about 0.01 of its potential returns per unit of risk. Barclays Capital is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,723 in Barclays Capital on August 30, 2024 and sell it today you would earn a total of 119.00 from holding Barclays Capital or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.44% |
| Values | Daily Returns |
Invesco High Income vs. Barclays Capital
Performance |
| Timeline |
| Invesco High Income |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Invesco High and Barclays Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco High and Barclays Capital
The main advantage of trading using opposite Invesco High and Barclays Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco High position performs unexpectedly, Barclays Capital 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 Barclays Capital will offset losses from the drop in Barclays Capital'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 |
| Barclays Capital vs. United States Oil | Barclays Capital vs. Invesco DB Oil | Barclays Capital vs. ProShares Ultra Bloomberg | Barclays Capital vs. United States Natural |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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