Correlation Between Invesco Technology and Aberden Emerng
Can any of the company-specific risk be diversified away by investing in both Invesco Technology and Aberden Emerng 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 Aberden Emerng 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 Aberden Emerng Mrkts, you can compare the effects of market volatilities on Invesco Technology and Aberden Emerng 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 Aberden Emerng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Technology and Aberden Emerng.
Diversification Opportunities for Invesco Technology and Aberden Emerng
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Invesco and Aberden is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Technology Fund and Aberden Emerng Mrkts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberden Emerng Mrkts 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 Aberden Emerng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberden Emerng Mrkts has no effect on the direction of Invesco Technology i.e., Invesco Technology and Aberden Emerng go up and down completely randomly.
Pair Corralation between Invesco Technology and Aberden Emerng
Assuming the 90 days horizon Invesco Technology Fund is expected to generate 1.6 times more return on investment than Aberden Emerng. However, Invesco Technology is 1.6 times more volatile than Aberden Emerng Mrkts. It trades about 0.09 of its potential returns per unit of risk. Aberden Emerng Mrkts is currently generating about 0.03 per unit of risk. If you would invest 4,041 in Invesco Technology Fund on September 4, 2024 and sell it today you would earn a total of 3,362 from holding Invesco Technology Fund or generate 83.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Technology Fund vs. Aberden Emerng Mrkts
Performance |
| Timeline |
| Invesco Technology |
| Aberden Emerng Mrkts |
Invesco Technology and Aberden Emerng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Technology and Aberden Emerng
The main advantage of trading using opposite Invesco Technology and Aberden Emerng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Technology position performs unexpectedly, Aberden Emerng 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 Aberden Emerng will offset losses from the drop in Aberden Emerng's long position.| Invesco Technology vs. Veea Inc | Invesco Technology vs. VHAI | Invesco Technology vs. VivoPower International PLC | Invesco Technology vs. WEBTOON Entertainment Common |
| Aberden Emerng vs. Aberdeen Emerging Markets | Aberden Emerng vs. Aberdeen Emerging Markets | Aberden Emerng vs. Aberdeen Emerging Markets | Aberden Emerng vs. Aberdeen Gbl Eq |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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