Correlation Between NYSE Composite and Invesco Actively
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Invesco Actively into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Invesco Actively Managed, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Invesco Actively. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Invesco Actively.
Diversification Opportunities for NYSE Composite and Invesco Actively
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Invesco is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Invesco Actively go up and down completely randomly.
Pair Corralation between NYSE Composite and Invesco Actively
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.95 times more return on investment than Invesco Actively. However, NYSE Composite is 2.95 times more volatile than Invesco Actively Managed. It trades about 0.14 of its potential returns per unit of risk. Invesco Actively Managed is currently generating about 0.08 per unit of risk. If you would invest 1,914,954 in NYSE Composite on August 29, 2024 and sell it today you would earn a total of 106,028 from holding NYSE Composite or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Invesco Actively Managed
Performance |
| Timeline |
NYSE Composite and Invesco Actively Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Invesco Actively Managed
Pair trading matchups for Invesco Actively
Pair Trading with NYSE Composite and Invesco Actively
The main advantage of trading using opposite NYSE Composite and Invesco Actively positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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