Correlation Between Invesco Optimum and Freedom 100
Can any of the company-specific risk be diversified away by investing in both Invesco Optimum and Freedom 100 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 Invesco Optimum and Freedom 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Optimum Yield and Freedom 100 Emerging, you can compare the effects of market volatilities on Invesco Optimum and Freedom 100 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 Invesco Optimum with a short position of Freedom 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Optimum and Freedom 100.
Diversification Opportunities for Invesco Optimum and Freedom 100
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Freedom is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Optimum Yield and Freedom 100 Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom 100 Emerging and Invesco Optimum 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 Invesco Optimum Yield are associated (or correlated) with Freedom 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom 100 Emerging has no effect on the direction of Invesco Optimum i.e., Invesco Optimum and Freedom 100 go up and down completely randomly.
Pair Corralation between Invesco Optimum and Freedom 100
Given the investment horizon of 90 days Invesco Optimum Yield is expected to generate 0.88 times more return on investment than Freedom 100. However, Invesco Optimum Yield is 1.14 times less risky than Freedom 100. It trades about -0.02 of its potential returns per unit of risk. Freedom 100 Emerging is currently generating about -0.26 per unit of risk. If you would invest 1,343 in Invesco Optimum Yield on August 29, 2024 and sell it today you would lose (7.00) from holding Invesco Optimum Yield or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Optimum Yield vs. Freedom 100 Emerging
Performance |
| Timeline |
| Invesco Optimum Yield |
| Freedom 100 Emerging |
Invesco Optimum and Freedom 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Optimum and Freedom 100
The main advantage of trading using opposite Invesco Optimum and Freedom 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Optimum position performs unexpectedly, Freedom 100 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 Freedom 100 will offset losses from the drop in Freedom 100's long position.| Invesco Optimum vs. iShares GSCI Commodity | Invesco Optimum vs. First Trust Global | Invesco Optimum vs. iShares SP GSCI | Invesco Optimum vs. Invesco DB Commodity |
| Freedom 100 vs. Horizon Kinetics Inflation | Freedom 100 vs. iShares MSCI Emerging | Freedom 100 vs. iShares Emerging Markets | Freedom 100 vs. WisdomTree International High |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |