Correlation Between NYSE Composite and Invesco Senior
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Invesco Senior 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 Senior 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 Senior Income, you can compare the effects of market volatilities on NYSE Composite and Invesco Senior 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 Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Invesco Senior.
Diversification Opportunities for NYSE Composite and Invesco Senior
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Invesco is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Invesco Senior Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Senior Income 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 Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Senior Income has no effect on the direction of NYSE Composite i.e., NYSE Composite and Invesco Senior go up and down completely randomly.
Pair Corralation between NYSE Composite and Invesco Senior
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.76 times more return on investment than Invesco Senior. However, NYSE Composite is 1.31 times less risky than Invesco Senior. It trades about 0.32 of its potential returns per unit of risk. Invesco Senior Income is currently generating about 0.16 per unit of risk. If you would invest 1,909,542 in NYSE Composite on November 3, 2024 and sell it today you would earn a total of 90,340 from holding NYSE Composite or generate 4.73% 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 Senior Income
Performance |
| Timeline |
NYSE Composite and Invesco Senior Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Invesco Senior Income
Pair trading matchups for Invesco Senior
Pair Trading with NYSE Composite and Invesco Senior
The main advantage of trading using opposite NYSE Composite and Invesco Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Invesco Senior 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 Senior will offset losses from the drop in Invesco Senior's long position.| NYSE Composite vs. Arrow Electronics | NYSE Composite vs. Cirmaker Technology | NYSE Composite vs. Zhihu Inc ADR | NYSE Composite vs. Weibo Corp |
| Invesco Senior vs. Nuveen Floating Rate | Invesco Senior vs. Blackrock Muni Intermediate | Invesco Senior vs. Eaton Vance Senior | Invesco Senior vs. BlackRock Floating Rate |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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