Correlation Between Invesco SP and High Yield
Can any of the company-specific risk be diversified away by investing in both Invesco SP and High Yield 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 SP and High Yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco SP 500 and High Yield Municipal Fund, you can compare the effects of market volatilities on Invesco SP and High Yield 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 SP with a short position of High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and High Yield.
Diversification Opportunities for Invesco SP and High Yield
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Invesco and High is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP 500 and High Yield Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Municipal and Invesco SP 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 SP 500 are associated (or correlated) with High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Municipal has no effect on the direction of Invesco SP i.e., Invesco SP and High Yield go up and down completely randomly.
Pair Corralation between Invesco SP and High Yield
Considering the 90-day investment horizon Invesco SP 500 is expected to generate 3.54 times more return on investment than High Yield. However, Invesco SP is 3.54 times more volatile than High Yield Municipal Fund. It trades about 0.06 of its potential returns per unit of risk. High Yield Municipal Fund is currently generating about 0.09 per unit of risk. If you would invest 4,615 in Invesco SP 500 on September 12, 2024 and sell it today you would earn a total of 982.00 from holding Invesco SP 500 or generate 21.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco SP 500 vs. High Yield Municipal Fund
Performance |
| Timeline |
| Invesco SP 500 |
| High Yield Municipal |
Invesco SP and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco SP and High Yield
The main advantage of trading using opposite Invesco SP and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco SP position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Invesco SP vs. Invesco Dynamic Building | Invesco SP vs. SCOR PK | Invesco SP vs. Morningstar Unconstrained Allocation | Invesco SP vs. Thrivent High Yield |
| High Yield vs. High Yield Fund Investor | High Yield vs. Intermediate Term Tax Free Bond | High Yield vs. California High Yield Municipal | High Yield vs. T Rowe Price |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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