Correlation Between Invesco Technology and Barings Active
Can any of the company-specific risk be diversified away by investing in both Invesco Technology and Barings Active 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 Barings Active 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 Barings Active Short, you can compare the effects of market volatilities on Invesco Technology and Barings Active 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 Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Technology and Barings Active.
Diversification Opportunities for Invesco Technology and Barings Active
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Barings is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Technology Fund and Barings Active Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Active Short 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 Barings Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Active Short has no effect on the direction of Invesco Technology i.e., Invesco Technology and Barings Active go up and down completely randomly.
Pair Corralation between Invesco Technology and Barings Active
Assuming the 90 days horizon Invesco Technology Fund is expected to generate 9.43 times more return on investment than Barings Active. However, Invesco Technology is 9.43 times more volatile than Barings Active Short. It trades about 0.09 of its potential returns per unit of risk. Barings Active Short is currently generating about 0.19 per unit of risk. If you would invest 4,705 in Invesco Technology Fund on August 31, 2024 and sell it today you would earn a total of 2,648 from holding Invesco Technology Fund or generate 56.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Technology Fund vs. Barings Active Short
Performance |
| Timeline |
| Invesco Technology |
| Barings Active Short |
Invesco Technology and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Technology and Barings Active
The main advantage of trading using opposite Invesco Technology and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Technology position performs unexpectedly, Barings Active 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 Barings Active will offset losses from the drop in Barings Active's long position.| Invesco Technology vs. Fidelity Advisor Health | Invesco Technology vs. Fidelity Advisor Financial | Invesco Technology vs. Fidelity Advisor Energy | Invesco Technology vs. Fidelity Advisor Semiconductors |
| Barings Active vs. Blrc Sgy Mnp | Barings Active vs. Ab Impact Municipal | Barings Active vs. Artisan High Income | Barings Active vs. Maryland Tax Free Bond |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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