Correlation Between Invesco Technology and Abbey Capital
Can any of the company-specific risk be diversified away by investing in both Invesco Technology and Abbey 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 Technology and Abbey Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Technology Fund and Abbey Capital Futures, you can compare the effects of market volatilities on Invesco Technology and Abbey 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 Technology with a short position of Abbey Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Technology and Abbey Capital.
Diversification Opportunities for Invesco Technology and Abbey Capital
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and Abbey is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Technology Fund and Abbey Capital Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbey Capital Futures and Invesco Technology 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 Technology Fund are associated (or correlated) with Abbey Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbey Capital Futures has no effect on the direction of Invesco Technology i.e., Invesco Technology and Abbey Capital go up and down completely randomly.
Pair Corralation between Invesco Technology and Abbey Capital
Assuming the 90 days horizon Invesco Technology is expected to generate 44.29 times less return on investment than Abbey Capital. In addition to that, Invesco Technology is 4.43 times more volatile than Abbey Capital Futures. It trades about 0.0 of its total potential returns per unit of risk. Abbey Capital Futures is currently generating about 0.07 per unit of volatility. If you would invest 1,052 in Abbey Capital Futures on November 5, 2024 and sell it today you would earn a total of 6.00 from holding Abbey Capital Futures or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Technology Fund vs. Abbey Capital Futures
Performance |
| Timeline |
| Invesco Technology |
| Abbey Capital Futures |
Invesco Technology and Abbey Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Technology and Abbey Capital
The main advantage of trading using opposite Invesco Technology and Abbey Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Technology position performs unexpectedly, Abbey 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 Abbey Capital will offset losses from the drop in Abbey Capital's long position.| Invesco Technology vs. Siit Emerging Markets | Invesco Technology vs. Western Assets Emerging | Invesco Technology vs. Mid Cap 15x Strategy | Invesco Technology vs. Vy Jpmorgan Emerging |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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