Correlation Between Invesco Gold and Western Asset
Can any of the company-specific risk be diversified away by investing in both Invesco Gold and Western Asset 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 Gold and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Gold Special and Western Asset Porate, you can compare the effects of market volatilities on Invesco Gold and Western Asset 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 Gold with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Gold and Western Asset.
Diversification Opportunities for Invesco Gold and Western Asset
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Western is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Gold Special and Western Asset Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Porate and Invesco Gold 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 Gold Special are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Porate has no effect on the direction of Invesco Gold i.e., Invesco Gold and Western Asset go up and down completely randomly.
Pair Corralation between Invesco Gold and Western Asset
Assuming the 90 days horizon Invesco Gold Special is expected to generate 3.91 times more return on investment than Western Asset. However, Invesco Gold is 3.91 times more volatile than Western Asset Porate. It trades about 0.05 of its potential returns per unit of risk. Western Asset Porate is currently generating about 0.04 per unit of risk. If you would invest 2,128 in Invesco Gold Special on November 9, 2024 and sell it today you would earn a total of 891.00 from holding Invesco Gold Special or generate 41.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Gold Special vs. Western Asset Porate
Performance |
| Timeline |
| Invesco Gold Special |
| Western Asset Porate |
Invesco Gold and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Gold and Western Asset
The main advantage of trading using opposite Invesco Gold and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Gold position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Invesco Gold vs. Artisan High Income | Invesco Gold vs. Barings High Yield | Invesco Gold vs. Intal High Relative | Invesco Gold vs. Aqr Alternative Risk |
| Western Asset vs. Great West Loomis Sayles | Western Asset vs. Palm Valley Capital | Western Asset vs. Vanguard Small Cap Value | Western Asset vs. Ab Small Cap |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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