Correlation Between Invesco Technology and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Invesco Technology and Sterling 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 Sterling 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 Sterling Capital Equity, you can compare the effects of market volatilities on Invesco Technology and Sterling 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Technology and Sterling Capital.
Diversification Opportunities for Invesco Technology and Sterling Capital
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Sterling is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Technology Fund and Sterling Capital Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Equity 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Equity has no effect on the direction of Invesco Technology i.e., Invesco Technology and Sterling Capital go up and down completely randomly.
Pair Corralation between Invesco Technology and Sterling Capital
Assuming the 90 days horizon Invesco Technology Fund is expected to generate 1.85 times more return on investment than Sterling Capital. However, Invesco Technology is 1.85 times more volatile than Sterling Capital Equity. It trades about 0.26 of its potential returns per unit of risk. Sterling Capital Equity is currently generating about 0.14 per unit of risk. If you would invest 6,813 in Invesco Technology Fund on August 26, 2024 and sell it today you would earn a total of 576.00 from holding Invesco Technology Fund or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Technology Fund vs. Sterling Capital Equity
Performance |
| Timeline |
| Invesco Technology |
| Sterling Capital Equity |
Invesco Technology and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Technology and Sterling Capital
The main advantage of trading using opposite Invesco Technology and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Technology position performs unexpectedly, Sterling 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Invesco Technology vs. VEEA | Invesco Technology vs. VivoPower International PLC | Invesco Technology vs. WEBTOON Entertainment Common | Invesco Technology vs. Invesco Municipal Income |
| Sterling Capital vs. Invesco Technology Fund | Sterling Capital vs. Dreyfus Technology Growth | Sterling Capital vs. Vanguard Information Technology | Sterling Capital vs. Towpath Technology |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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