Correlation Between Invesco Steelpath and Pimco Municipal
Can any of the company-specific risk be diversified away by investing in both Invesco Steelpath and Pimco Municipal 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 Steelpath and Pimco Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Steelpath Mlp and Pimco Municipal Income, you can compare the effects of market volatilities on Invesco Steelpath and Pimco Municipal 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 Steelpath with a short position of Pimco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Steelpath and Pimco Municipal.
Diversification Opportunities for Invesco Steelpath and Pimco Municipal
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and Pimco is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Steelpath Mlp and Pimco Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Municipal Income and Invesco Steelpath 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 Steelpath Mlp are associated (or correlated) with Pimco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Municipal Income has no effect on the direction of Invesco Steelpath i.e., Invesco Steelpath and Pimco Municipal go up and down completely randomly.
Pair Corralation between Invesco Steelpath and Pimco Municipal
Assuming the 90 days horizon Invesco Steelpath Mlp is expected to generate 1.15 times more return on investment than Pimco Municipal. However, Invesco Steelpath is 1.15 times more volatile than Pimco Municipal Income. It trades about 0.23 of its potential returns per unit of risk. Pimco Municipal Income is currently generating about 0.07 per unit of risk. If you would invest 478.00 in Invesco Steelpath Mlp on September 2, 2024 and sell it today you would earn a total of 164.00 from holding Invesco Steelpath Mlp or generate 34.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Steelpath Mlp vs. Pimco Municipal Income
Performance |
| Timeline |
| Invesco Steelpath Mlp |
| Pimco Municipal Income |
Invesco Steelpath and Pimco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Steelpath and Pimco Municipal
The main advantage of trading using opposite Invesco Steelpath and Pimco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Steelpath position performs unexpectedly, Pimco Municipal 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 Pimco Municipal will offset losses from the drop in Pimco Municipal's long position.| Invesco Steelpath vs. Ms Global Fixed | Invesco Steelpath vs. Rbc Global Equity | Invesco Steelpath vs. Multimedia Portfolio Multimedia | Invesco Steelpath vs. Small Cap Equity |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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