Correlation Between Invesco Technology and Pimco Long
Can any of the company-specific risk be diversified away by investing in both Invesco Technology and Pimco Long 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 Pimco Long 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 Pimco Long Duration, you can compare the effects of market volatilities on Invesco Technology and Pimco Long 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 Pimco Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Technology and Pimco Long.
Diversification Opportunities for Invesco Technology and Pimco Long
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Pimco is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Technology Fund and Pimco Long Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Long Duration 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 Pimco Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Long Duration has no effect on the direction of Invesco Technology i.e., Invesco Technology and Pimco Long go up and down completely randomly.
Pair Corralation between Invesco Technology and Pimco Long
Assuming the 90 days horizon Invesco Technology Fund is expected to generate 3.19 times more return on investment than Pimco Long. However, Invesco Technology is 3.19 times more volatile than Pimco Long Duration. It trades about 0.03 of its potential returns per unit of risk. Pimco Long Duration is currently generating about 0.06 per unit of risk. If you would invest 6,681 in Invesco Technology Fund on November 4, 2024 and sell it today you would earn a total of 54.00 from holding Invesco Technology Fund or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Technology Fund vs. Pimco Long Duration
Performance |
| Timeline |
| Invesco Technology |
| Pimco Long Duration |
Invesco Technology and Pimco Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Technology and Pimco Long
The main advantage of trading using opposite Invesco Technology and Pimco Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Technology position performs unexpectedly, Pimco Long 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 Pimco Long will offset losses from the drop in Pimco Long'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 |
| Pimco Long vs. Pimco Rae Worldwide | Pimco Long vs. Pimco Rae Worldwide | Pimco Long vs. Pimco Rae Worldwide | Pimco Long vs. Pimco Rae Worldwide |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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