Correlation Between Swiss Re and Invesco High
Can any of the company-specific risk be diversified away by investing in both Swiss Re and Invesco High 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 Swiss Re and Invesco High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Re and Invesco High Income, you can compare the effects of market volatilities on Swiss Re and Invesco High 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 Swiss Re with a short position of Invesco High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Re and Invesco High.
Diversification Opportunities for Swiss Re and Invesco High
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Swiss and Invesco is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Re and Invesco High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco High Income and Swiss Re 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 Swiss Re are associated (or correlated) with Invesco High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco High Income has no effect on the direction of Swiss Re i.e., Swiss Re and Invesco High go up and down completely randomly.
Pair Corralation between Swiss Re and Invesco High
Assuming the 90 days horizon Swiss Re is expected to generate 18.13 times more return on investment than Invesco High. However, Swiss Re is 18.13 times more volatile than Invesco High Income. It trades about 0.25 of its potential returns per unit of risk. Invesco High Income is currently generating about 0.29 per unit of risk. If you would invest 3,261 in Swiss Re on August 28, 2024 and sell it today you would earn a total of 341.00 from holding Swiss Re or generate 10.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Re vs. Invesco High Income
Performance |
| Timeline |
| Swiss Re |
| Invesco High Income |
Swiss Re and Invesco High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swiss Re and Invesco High
The main advantage of trading using opposite Swiss Re and Invesco High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Re position performs unexpectedly, Invesco High 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 High will offset losses from the drop in Invesco High's long position.| Swiss Re vs. Invesco High Income | Swiss Re vs. Blackrock Muniholdings Ny | Swiss Re vs. MFS Investment Grade | Swiss Re vs. Federated Premier Municipal |
| Invesco High vs. MFS Investment Grade | Invesco High vs. Eaton Vance National | Invesco High vs. Nuveen California Select | Invesco High vs. Federated Premier Municipal |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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