Correlation Between Invesco Technology and Fmasx
Can any of the company-specific risk be diversified away by investing in both Invesco Technology and Fmasx 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 Fmasx 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 Fmasx, you can compare the effects of market volatilities on Invesco Technology and Fmasx 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 Fmasx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Technology and Fmasx.
Diversification Opportunities for Invesco Technology and Fmasx
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Fmasx is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Technology Fund and Fmasx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fmasx 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 Fmasx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fmasx has no effect on the direction of Invesco Technology i.e., Invesco Technology and Fmasx go up and down completely randomly.
Pair Corralation between Invesco Technology and Fmasx
Assuming the 90 days horizon Invesco Technology is expected to generate 2.57 times less return on investment than Fmasx. In addition to that, Invesco Technology is 1.61 times more volatile than Fmasx. It trades about 0.03 of its total potential returns per unit of risk. Fmasx is currently generating about 0.12 per unit of volatility. If you would invest 1,501 in Fmasx on November 4, 2024 and sell it today you would earn a total of 45.00 from holding Fmasx or generate 3.0% 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. Fmasx
Performance |
| Timeline |
| Invesco Technology |
| Fmasx |
Invesco Technology and Fmasx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Technology and Fmasx
The main advantage of trading using opposite Invesco Technology and Fmasx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Technology position performs unexpectedly, Fmasx 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 Fmasx will offset losses from the drop in Fmasx'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 |
| Fmasx vs. Angel Oak Multi Strategy | Fmasx vs. Mid Cap 15x Strategy | Fmasx vs. Balanced Strategy Fund | Fmasx vs. Barings Emerging Markets |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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