Correlation Between Invesco Gold and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both Invesco Gold and Stone Harbor 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 Stone Harbor 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 Stone Harbor Local, you can compare the effects of market volatilities on Invesco Gold and Stone Harbor 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 Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Gold and Stone Harbor.
Diversification Opportunities for Invesco Gold and Stone Harbor
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Invesco and Stone is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Gold Special and Stone Harbor Local in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Harbor Local 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 Stone Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Harbor Local has no effect on the direction of Invesco Gold i.e., Invesco Gold and Stone Harbor go up and down completely randomly.
Pair Corralation between Invesco Gold and Stone Harbor
Assuming the 90 days horizon Invesco Gold Special is expected to generate 3.75 times more return on investment than Stone Harbor. However, Invesco Gold is 3.75 times more volatile than Stone Harbor Local. It trades about 0.08 of its potential returns per unit of risk. Stone Harbor Local is currently generating about 0.03 per unit of risk. If you would invest 2,434 in Invesco Gold Special on September 14, 2024 and sell it today you would earn a total of 433.00 from holding Invesco Gold Special or generate 17.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Invesco Gold Special vs. Stone Harbor Local
Performance |
| Timeline |
| Invesco Gold Special |
| Stone Harbor Local |
Invesco Gold and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Gold and Stone Harbor
The main advantage of trading using opposite Invesco Gold and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Gold position performs unexpectedly, Stone Harbor 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 Stone Harbor will offset losses from the drop in Stone Harbor's long position.| Invesco Gold vs. Invesco Municipal Income | Invesco Gold vs. Invesco Municipal Income | Invesco Gold vs. Invesco Municipal Income | Invesco Gold vs. Oppenheimer Rising Dividends |
| Stone Harbor vs. Stone Harbor Emerging | Stone Harbor vs. Stone Harbor Emerging | Stone Harbor vs. Investment Of America | Stone Harbor vs. Environment And Alternative |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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