Correlation Between Invesco High and Stellus Capital
Can any of the company-specific risk be diversified away by investing in both Invesco High and Stellus 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 Stellus 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 Stellus Capital Investment, you can compare the effects of market volatilities on Invesco High and Stellus 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 Stellus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and Stellus Capital.
Diversification Opportunities for Invesco High and Stellus Capital
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Stellus is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Income and Stellus Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stellus Capital Inve 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 Stellus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stellus Capital Inve has no effect on the direction of Invesco High i.e., Invesco High and Stellus Capital go up and down completely randomly.
Pair Corralation between Invesco High and Stellus Capital
Given the investment horizon of 90 days Invesco High is expected to generate 20.43 times less return on investment than Stellus Capital. But when comparing it to its historical volatility, Invesco High Income is 1.92 times less risky than Stellus Capital. It trades about 0.0 of its potential returns per unit of risk. Stellus Capital Investment is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,073 in Stellus Capital Investment on August 24, 2024 and sell it today you would earn a total of 308.00 from holding Stellus Capital Investment or generate 28.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco High Income vs. Stellus Capital Investment
Performance |
| Timeline |
| Invesco High Income |
| Stellus Capital Inve |
Invesco High and Stellus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco High and Stellus Capital
The main advantage of trading using opposite Invesco High and Stellus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco High position performs unexpectedly, Stellus 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 Stellus Capital will offset losses from the drop in Stellus 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 |
| Stellus Capital vs. PennantPark Floating Rate | Stellus Capital vs. Gladstone Capital | Stellus Capital vs. Gladstone Investment | Stellus Capital vs. Prospect Capital |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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