Correlation Between Victory Capital and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both Victory Capital and Invesco 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 Victory Capital and Invesco Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory Capital Holdings and Invesco Municipal Trust, you can compare the effects of market volatilities on Victory Capital and Invesco 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 Victory Capital with a short position of Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Capital and Invesco Municipal.
Diversification Opportunities for Victory Capital and Invesco Municipal
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Victory and Invesco is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Victory Capital Holdings and Invesco Municipal Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Trust and Victory 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 Victory Capital Holdings are associated (or correlated) with Invesco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Trust has no effect on the direction of Victory Capital i.e., Victory Capital and Invesco Municipal go up and down completely randomly.
Pair Corralation between Victory Capital and Invesco Municipal
Given the investment horizon of 90 days Victory Capital Holdings is expected to generate 4.75 times more return on investment than Invesco Municipal. However, Victory Capital is 4.75 times more volatile than Invesco Municipal Trust. It trades about 0.17 of its potential returns per unit of risk. Invesco Municipal Trust is currently generating about 0.02 per unit of risk. If you would invest 5,426 in Victory Capital Holdings on August 23, 2024 and sell it today you would earn a total of 1,424 from holding Victory Capital Holdings or generate 26.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory Capital Holdings vs. Invesco Municipal Trust
Performance |
| Timeline |
| Victory Capital Holdings |
| Invesco Municipal Trust |
Victory Capital and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Capital and Invesco Municipal
The main advantage of trading using opposite Victory Capital and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Capital position performs unexpectedly, Invesco 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 Invesco Municipal will offset losses from the drop in Invesco Municipal's long position.| Victory Capital vs. Federated Premier Municipal | Victory Capital vs. Blackrock Muniyield | Victory Capital vs. Diamond Hill Investment | Victory Capital vs. NXG NextGen Infrastructure |
| Invesco Municipal vs. Pioneer Floating Rate | Invesco Municipal vs. The Gabelli Equity | Invesco Municipal vs. Pioneer Municipal High | Invesco Municipal vs. Nuveen Global High |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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