Correlation Between Prospect Capital and Invesco Pennsylvania
Can any of the company-specific risk be diversified away by investing in both Prospect Capital and Invesco Pennsylvania 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 Prospect Capital and Invesco Pennsylvania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prospect Capital and Invesco Pennsylvania Value, you can compare the effects of market volatilities on Prospect Capital and Invesco Pennsylvania 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 Prospect Capital with a short position of Invesco Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prospect Capital and Invesco Pennsylvania.
Diversification Opportunities for Prospect Capital and Invesco Pennsylvania
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Prospect and Invesco is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Prospect Capital and Invesco Pennsylvania Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Pennsylvania and Prospect Capital 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 Prospect Capital are associated (or correlated) with Invesco Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Pennsylvania has no effect on the direction of Prospect Capital i.e., Prospect Capital and Invesco Pennsylvania go up and down completely randomly.
Pair Corralation between Prospect Capital and Invesco Pennsylvania
Given the investment horizon of 90 days Prospect Capital is expected to under-perform the Invesco Pennsylvania. In addition to that, Prospect Capital is 2.13 times more volatile than Invesco Pennsylvania Value. It trades about -0.02 of its total potential returns per unit of risk. Invesco Pennsylvania Value is currently generating about 0.05 per unit of volatility. If you would invest 914.00 in Invesco Pennsylvania Value on August 24, 2024 and sell it today you would earn a total of 189.00 from holding Invesco Pennsylvania Value or generate 20.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prospect Capital vs. Invesco Pennsylvania Value
Performance |
| Timeline |
| Prospect Capital |
| Invesco Pennsylvania |
Prospect Capital and Invesco Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prospect Capital and Invesco Pennsylvania
The main advantage of trading using opposite Prospect Capital and Invesco Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prospect Capital position performs unexpectedly, Invesco Pennsylvania 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 Pennsylvania will offset losses from the drop in Invesco Pennsylvania's long position.| Prospect Capital vs. Gladstone Capital | Prospect Capital vs. Horizon Technology Finance | Prospect Capital vs. Gladstone Investment | Prospect Capital vs. Stellus Capital Investment |
| Invesco Pennsylvania vs. Pimco New York | Invesco Pennsylvania vs. Blackrock Muniholdings Ny | Invesco Pennsylvania vs. Eaton Vance National | Invesco Pennsylvania vs. Nuveen New York |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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