Correlation Between Pioneer Municipal and Invesco Advantage
Can any of the company-specific risk be diversified away by investing in both Pioneer Municipal and Invesco Advantage 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 Pioneer Municipal and Invesco Advantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pioneer Municipal High and Invesco Advantage MIT, you can compare the effects of market volatilities on Pioneer Municipal and Invesco Advantage 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 Pioneer Municipal with a short position of Invesco Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer Municipal and Invesco Advantage.
Diversification Opportunities for Pioneer Municipal and Invesco Advantage
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pioneer and Invesco is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Municipal High and Invesco Advantage MIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Advantage MIT and Pioneer Municipal 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 Pioneer Municipal High are associated (or correlated) with Invesco Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Advantage MIT has no effect on the direction of Pioneer Municipal i.e., Pioneer Municipal and Invesco Advantage go up and down completely randomly.
Pair Corralation between Pioneer Municipal and Invesco Advantage
Considering the 90-day investment horizon Pioneer Municipal High is expected to generate 1.17 times more return on investment than Invesco Advantage. However, Pioneer Municipal is 1.17 times more volatile than Invesco Advantage MIT. It trades about 0.04 of its potential returns per unit of risk. Invesco Advantage MIT is currently generating about 0.04 per unit of risk. If you would invest 751.00 in Pioneer Municipal High on August 27, 2024 and sell it today you would earn a total of 116.00 from holding Pioneer Municipal High or generate 15.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pioneer Municipal High vs. Invesco Advantage MIT
Performance |
| Timeline |
| Pioneer Municipal High |
| Invesco Advantage MIT |
Pioneer Municipal and Invesco Advantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pioneer Municipal and Invesco Advantage
The main advantage of trading using opposite Pioneer Municipal and Invesco Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneer Municipal position performs unexpectedly, Invesco Advantage 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 Invesco Advantage will offset losses from the drop in Invesco Advantage's long position.| Pioneer Municipal vs. New America High | Pioneer Municipal vs. DWS Municipal Income | Pioneer Municipal vs. RiverNorth Specialty Finance | Pioneer Municipal vs. Putnam Managed Municipal |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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