Correlation Between VanEck Long and Invesco Actively
Can any of the company-specific risk be diversified away by investing in both VanEck Long and Invesco Actively 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 VanEck Long and Invesco Actively into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Long Muni and Invesco Actively Managed, you can compare the effects of market volatilities on VanEck Long and Invesco Actively 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 VanEck Long with a short position of Invesco Actively. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Long and Invesco Actively.
Diversification Opportunities for VanEck Long and Invesco Actively
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and Invesco is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Long Muni and Invesco Actively Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Actively Managed and VanEck Long 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 VanEck Long Muni are associated (or correlated) with Invesco Actively. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Actively Managed has no effect on the direction of VanEck Long i.e., VanEck Long and Invesco Actively go up and down completely randomly.
Pair Corralation between VanEck Long and Invesco Actively
Considering the 90-day investment horizon VanEck Long Muni is expected to generate 2.01 times more return on investment than Invesco Actively. However, VanEck Long is 2.01 times more volatile than Invesco Actively Managed. It trades about 0.1 of its potential returns per unit of risk. Invesco Actively Managed is currently generating about 0.15 per unit of risk. If you would invest 1,738 in VanEck Long Muni on August 29, 2024 and sell it today you would earn a total of 84.00 from holding VanEck Long Muni or generate 4.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Long Muni vs. Invesco Actively Managed
Performance |
| Timeline |
| VanEck Long Muni |
| Invesco Actively Managed |
VanEck Long and Invesco Actively Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Long and Invesco Actively
The main advantage of trading using opposite VanEck Long and Invesco Actively positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Long position performs unexpectedly, Invesco Actively 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 Actively will offset losses from the drop in Invesco Actively's long position.| VanEck Long vs. VanEck Intermediate Muni | VanEck Long vs. VanEck Short Muni | VanEck Long vs. Invesco National AMT Free | VanEck Long vs. SPDR Nuveen Bloomberg |
| Invesco Actively vs. Franklin Liberty Federal | Invesco Actively vs. Hartford Municipal Opportunities | Invesco Actively vs. IQ MacKay Municipal | Invesco Actively vs. First Trust Municipal |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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