Correlation Between 3M and Invesco High
Can any of the company-specific risk be diversified away by investing in both 3M and Invesco High 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 3M and Invesco High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3M Company and Invesco High Yield, you can compare the effects of market volatilities on 3M and Invesco High 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 3M with a short position of Invesco High. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and Invesco High.
Diversification Opportunities for 3M and Invesco High
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 3M and Invesco is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and Invesco High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco High Yield and 3M 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 3M Company are associated (or correlated) with Invesco High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco High Yield has no effect on the direction of 3M i.e., 3M and Invesco High go up and down completely randomly.
Pair Corralation between 3M and Invesco High
If you would invest 12,518 in 3M Company on September 5, 2024 and sell it today you would earn a total of 597.00 from holding 3M Company or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
3M Company vs. Invesco High Yield
Performance |
| Timeline |
| 3M Company |
| Invesco High Yield |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
3M and Invesco High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and Invesco High
The main advantage of trading using opposite 3M and Invesco High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, Invesco High 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 High will offset losses from the drop in Invesco High's long position.| 3M vs. MDU Resources Group | 3M vs. Valmont Industries | 3M vs. Griffon | 3M vs. Compass Diversified Holdings |
| Invesco High vs. Qs Large Cap | Invesco High vs. Qs Large Cap | Invesco High vs. Fundamental Large Cap | Invesco High vs. Siit Large Cap |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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