Correlation Between Invesco Select and Invesco Senior
Can any of the company-specific risk be diversified away by investing in both Invesco Select 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 Invesco Select and Invesco Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Select Risk and Invesco Senior Loan, you can compare the effects of market volatilities on Invesco Select 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 Invesco Select with a short position of Invesco Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Select and Invesco Senior.
Diversification Opportunities for Invesco Select and Invesco Senior
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and Invesco is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Select Risk and Invesco Senior Loan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Senior Loan and Invesco Select 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 Select Risk 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 Loan has no effect on the direction of Invesco Select i.e., Invesco Select and Invesco Senior go up and down completely randomly.
Pair Corralation between Invesco Select and Invesco Senior
Assuming the 90 days horizon Invesco Select Risk is expected to generate 2.63 times more return on investment than Invesco Senior. However, Invesco Select is 2.63 times more volatile than Invesco Senior Loan. It trades about 0.3 of its potential returns per unit of risk. Invesco Senior Loan is currently generating about -0.07 per unit of risk. If you would invest 887.00 in Invesco Select Risk on September 4, 2024 and sell it today you would earn a total of 17.00 from holding Invesco Select Risk or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Select Risk vs. Invesco Senior Loan
Performance |
| Timeline |
| Invesco Select Risk |
| Invesco Senior Loan |
Invesco Select and Invesco Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Select and Invesco Senior
The main advantage of trading using opposite Invesco Select and Invesco Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Select 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.| Invesco Select vs. Prudential Government Income | Invesco Select vs. Inverse Government Long | Invesco Select vs. Aig Government Money | Invesco Select vs. Dreyfus Government Cash |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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