Correlation Between Pimco California and Invesco Advantage
Can any of the company-specific risk be diversified away by investing in both Pimco California and Invesco Advantage 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 Pimco California and Invesco Advantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco California Municipal and Invesco Advantage MIT, you can compare the effects of market volatilities on Pimco California and Invesco Advantage 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 Pimco California with a short position of Invesco Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco California and Invesco Advantage.
Diversification Opportunities for Pimco California and Invesco Advantage
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pimco and Invesco is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Pimco California Municipal and Invesco Advantage MIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Advantage MIT and Pimco 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 Pimco California Municipal are associated (or correlated) with Invesco Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Advantage MIT has no effect on the direction of Pimco California i.e., Pimco California and Invesco Advantage go up and down completely randomly.
Pair Corralation between Pimco California and Invesco Advantage
Considering the 90-day investment horizon Pimco California Municipal is expected to under-perform the Invesco Advantage. But the fund apears to be less risky and, when comparing its historical volatility, Pimco California Municipal is 1.06 times less risky than Invesco Advantage. The fund trades about -0.2 of its potential returns per unit of risk. The Invesco Advantage MIT is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 882.00 in Invesco Advantage MIT on August 27, 2024 and sell it today you would earn a total of 18.00 from holding Invesco Advantage MIT or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco California Municipal vs. Invesco Advantage MIT
Performance |
| Timeline |
| Pimco California Mun |
| Invesco Advantage MIT |
Pimco California and Invesco Advantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco California and Invesco Advantage
The main advantage of trading using opposite Pimco California and Invesco Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco California position performs unexpectedly, Invesco Advantage 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 Advantage will offset losses from the drop in Invesco Advantage's long position.| Pimco California vs. Pimco California Municipal | Pimco California vs. Eaton Vance California | Pimco California vs. Invesco California Value | Pimco California vs. BlackRock California Municipal |
| Invesco Advantage vs. PowerUp Acquisition Corp | Invesco Advantage vs. Aurora Innovation | Invesco Advantage vs. HUMANA INC | Invesco Advantage vs. Aquagold International |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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