Correlation Between Msift High and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both Msift High and Invesco Municipal 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 Msift High and Invesco Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Msift High Yield and Invesco Municipal Income, you can compare the effects of market volatilities on Msift High and Invesco Municipal 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 Msift High with a short position of Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Msift High and Invesco Municipal.
Diversification Opportunities for Msift High and Invesco Municipal
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Msift and Invesco is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Msift High Yield and Invesco Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Income and Msift High 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 Msift High Yield are associated (or correlated) with Invesco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Income has no effect on the direction of Msift High i.e., Msift High and Invesco Municipal go up and down completely randomly.
Pair Corralation between Msift High and Invesco Municipal
Assuming the 90 days horizon Msift High is expected to generate 2.14 times less return on investment than Invesco Municipal. But when comparing it to its historical volatility, Msift High Yield is 1.17 times less risky than Invesco Municipal. It trades about 0.12 of its potential returns per unit of risk. Invesco Municipal Income is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,189 in Invesco Municipal Income on November 9, 2024 and sell it today you would earn a total of 12.00 from holding Invesco Municipal Income or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Msift High Yield vs. Invesco Municipal Income
Performance |
| Timeline |
| Msift High Yield |
| Invesco Municipal Income |
Msift High and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Msift High and Invesco Municipal
The main advantage of trading using opposite Msift High and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Msift High position performs unexpectedly, Invesco Municipal 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 Municipal will offset losses from the drop in Invesco Municipal's long position.| Msift High vs. Absolute Convertible Arbitrage | Msift High vs. Advent Claymore Convertible | Msift High vs. Columbia Vertible Securities | Msift High vs. Mainstay Vertible Fund |
| Invesco Municipal vs. American Century Etf | Invesco Municipal vs. Fpa Queens Road | Invesco Municipal vs. Great West Loomis Sayles | Invesco Municipal vs. Valic Company I |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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