Correlation Between Invesco Actively and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Invesco Actively and Dow Jones 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 Actively and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Actively Managed and Dow Jones Industrial, you can compare the effects of market volatilities on Invesco Actively and Dow Jones 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 Actively with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Actively and Dow Jones.
Diversification Opportunities for Invesco Actively and Dow Jones
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Dow is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Actively Managed and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Invesco Actively 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 Actively Managed are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Invesco Actively i.e., Invesco Actively and Dow Jones go up and down completely randomly.
Pair Corralation between Invesco Actively and Dow Jones
Given the investment horizon of 90 days Invesco Actively is expected to generate 8.03 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Invesco Actively Managed is 4.06 times less risky than Dow Jones. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,211,440 in Dow Jones Industrial on October 25, 2024 and sell it today you would earn a total of 245,067 from holding Dow Jones Industrial or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.36% |
| Values | Daily Returns |
Invesco Actively Managed vs. Dow Jones Industrial
Performance |
| Timeline |
Invesco Actively and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Invesco Actively Managed
Pair trading matchups for Invesco Actively
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Invesco Actively and Dow Jones
The main advantage of trading using opposite Invesco Actively and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Actively position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Invesco Actively vs. SSGA Active Trust | Invesco Actively vs. SPDR Nuveen Municipal | Invesco Actively vs. iShares Short Maturity | Invesco Actively vs. First Trust Flexible |
| Dow Jones vs. Xiabuxiabu Catering Management | Dow Jones vs. Neogen | Dow Jones vs. Orion Office Reit | Dow Jones vs. Bassett Furniture Industries |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |