Correlation Between Invesco California and Invesco New
Can any of the company-specific risk be diversified away by investing in both Invesco California and Invesco New 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 California and Invesco New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco California AMT Free and Invesco New York, you can compare the effects of market volatilities on Invesco California and Invesco New 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 California with a short position of Invesco New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco California and Invesco New.
Diversification Opportunities for Invesco California and Invesco New
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Invesco is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Invesco California AMT Free and Invesco New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco New York and Invesco California 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 California AMT Free are associated (or correlated) with Invesco New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco New York has no effect on the direction of Invesco California i.e., Invesco California and Invesco New go up and down completely randomly.
Pair Corralation between Invesco California and Invesco New
Considering the 90-day investment horizon Invesco California AMT Free is expected to under-perform the Invesco New. In addition to that, Invesco California is 1.07 times more volatile than Invesco New York. It trades about -0.21 of its total potential returns per unit of risk. Invesco New York is currently generating about -0.21 per unit of volatility. If you would invest 2,230 in Invesco New York on January 12, 2025 and sell it today you would lose (113.00) from holding Invesco New York or give up 5.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco California AMT Free vs. Invesco New York
Performance |
| Timeline |
| Invesco California AMT |
| Invesco New York |
Invesco California and Invesco New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco California and Invesco New
The main advantage of trading using opposite Invesco California and Invesco New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco California position performs unexpectedly, Invesco New 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 New will offset losses from the drop in Invesco New's long position.| Invesco California vs. iShares New York | Invesco California vs. iShares Intermediate GovernmentCredit | Invesco California vs. iShares Short Term National | Invesco California vs. iShares Agency Bond |
| Invesco New vs. Invesco California AMT Free | Invesco New vs. iShares New York | Invesco New vs. Invesco VRDO Tax Free | Invesco New vs. Invesco National AMT Free |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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