Correlation Between Stellus Capital and Invesco Trust
Can any of the company-specific risk be diversified away by investing in both Stellus Capital and Invesco Trust 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 Stellus Capital and Invesco Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellus Capital Investment and Invesco Trust For, you can compare the effects of market volatilities on Stellus Capital and Invesco Trust 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 Stellus Capital with a short position of Invesco Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellus Capital and Invesco Trust.
Diversification Opportunities for Stellus Capital and Invesco Trust
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Stellus and Invesco is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Stellus Capital Investment and Invesco Trust For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Trust For and Stellus 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 Stellus Capital Investment are associated (or correlated) with Invesco Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Trust For has no effect on the direction of Stellus Capital i.e., Stellus Capital and Invesco Trust go up and down completely randomly.
Pair Corralation between Stellus Capital and Invesco Trust
Considering the 90-day investment horizon Stellus Capital Investment is expected to generate 1.73 times more return on investment than Invesco Trust. However, Stellus Capital is 1.73 times more volatile than Invesco Trust For. It trades about 0.05 of its potential returns per unit of risk. Invesco Trust For is currently generating about 0.05 per unit of risk. If you would invest 1,073 in Stellus Capital Investment on August 24, 2024 and sell it today you would earn a total of 308.00 from holding Stellus Capital Investment or generate 28.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stellus Capital Investment vs. Invesco Trust For
Performance |
| Timeline |
| Stellus Capital Inve |
| Invesco Trust For |
Stellus Capital and Invesco Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellus Capital and Invesco Trust
The main advantage of trading using opposite Stellus Capital and Invesco Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellus Capital position performs unexpectedly, Invesco Trust 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 Trust will offset losses from the drop in Invesco Trust's long position.| Stellus Capital vs. PennantPark Floating Rate | Stellus Capital vs. Gladstone Capital | Stellus Capital vs. Gladstone Investment | Stellus Capital vs. Prospect Capital |
| Invesco Trust vs. Pimco New York | Invesco Trust vs. Pimco New York | Invesco Trust vs. BlackRock New York | Invesco Trust vs. Invesco California Value |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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