Correlation Between Invesco Technology and Steward Small
Can any of the company-specific risk be diversified away by investing in both Invesco Technology and Steward Small 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 Steward Small 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 Steward Small Mid Cap, you can compare the effects of market volatilities on Invesco Technology and Steward Small 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 Steward Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Technology and Steward Small.
Diversification Opportunities for Invesco Technology and Steward Small
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and Steward is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Technology Fund and Steward Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Small Mid 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 Steward Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Small Mid has no effect on the direction of Invesco Technology i.e., Invesco Technology and Steward Small go up and down completely randomly.
Pair Corralation between Invesco Technology and Steward Small
Assuming the 90 days horizon Invesco Technology Fund is expected to generate 1.3 times more return on investment than Steward Small. However, Invesco Technology is 1.3 times more volatile than Steward Small Mid Cap. It trades about 0.12 of its potential returns per unit of risk. Steward Small Mid Cap is currently generating about 0.1 per unit of risk. If you would invest 4,769 in Invesco Technology Fund on September 1, 2024 and sell it today you would earn a total of 2,584 from holding Invesco Technology Fund or generate 54.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
Invesco Technology Fund vs. Steward Small Mid Cap
Performance |
| Timeline |
| Invesco Technology |
| Steward Small Mid |
Invesco Technology and Steward Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Technology and Steward Small
The main advantage of trading using opposite Invesco Technology and Steward Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Technology position performs unexpectedly, Steward Small 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 Steward Small will offset losses from the drop in Steward Small's long position.| Invesco Technology vs. Gamco Global Gold | Invesco Technology vs. Europac Gold Fund | Invesco Technology vs. Gold And Precious | Invesco Technology vs. Global Gold Fund |
| Steward Small vs. Steward Small Mid Cap | Steward Small vs. Steward Ered Call | Steward Small vs. Steward Ered Call | Steward Small vs. Steward Ered Call |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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