Correlation Between Invesco High and SRH Total

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Invesco High and SRH Total 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 SRH Total 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 SRH Total Return, you can compare the effects of market volatilities on Invesco High and SRH Total 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 SRH Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and SRH Total.

Diversification Opportunities for Invesco High and SRH Total

0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between Invesco and SRH is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Income and SRH Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SRH Total Return 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 SRH Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SRH Total Return has no effect on the direction of Invesco High i.e., Invesco High and SRH Total go up and down completely randomly.

Pair Corralation between Invesco High and SRH Total

Given the investment horizon of 90 days Invesco High is expected to generate 2.09 times less return on investment than SRH Total. But when comparing it to its historical volatility, Invesco High Income is 1.59 times less risky than SRH Total. It trades about 0.08 of its potential returns per unit of risk. SRH Total Return is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,228  in SRH Total Return on August 31, 2024 and sell it today you would earn a total of  445.00  from holding SRH Total Return or generate 36.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.73%
ValuesDaily Returns

Invesco High Income  vs.  SRH Total Return

 Performance 
       Timeline  
Invesco High Income 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Invesco High Income are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Invesco High is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
SRH Total Return 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in SRH Total Return are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, SRH Total may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Invesco High and SRH Total Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Invesco High and SRH Total

The main advantage of trading using opposite Invesco High and SRH Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco High position performs unexpectedly, SRH Total 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 SRH Total will offset losses from the drop in SRH Total's long position.
The idea behind Invesco High Income and SRH Total Return pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

Other Complementary Tools

Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
CEOs Directory
Screen CEOs from public companies around the world
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets