Correlation Between Invesco Trust and Blackrock Muniyield
Can any of the company-specific risk be diversified away by investing in both Invesco Trust and Blackrock Muniyield 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 Trust and Blackrock Muniyield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Trust For and Blackrock Muniyield, you can compare the effects of market volatilities on Invesco Trust and Blackrock Muniyield 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 Trust with a short position of Blackrock Muniyield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Trust and Blackrock Muniyield.
Diversification Opportunities for Invesco Trust and Blackrock Muniyield
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Blackrock is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Trust For and Blackrock Muniyield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield and Invesco Trust 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 Trust For are associated (or correlated) with Blackrock Muniyield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniyield has no effect on the direction of Invesco Trust i.e., Invesco Trust and Blackrock Muniyield go up and down completely randomly.
Pair Corralation between Invesco Trust and Blackrock Muniyield
Considering the 90-day investment horizon Invesco Trust For is expected to generate 0.94 times more return on investment than Blackrock Muniyield. However, Invesco Trust For is 1.06 times less risky than Blackrock Muniyield. It trades about 0.0 of its potential returns per unit of risk. Blackrock Muniyield is currently generating about -0.06 per unit of risk. If you would invest 1,017 in Invesco Trust For on August 24, 2024 and sell it today you would lose (1.00) from holding Invesco Trust For or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Trust For vs. Blackrock Muniyield
Performance |
| Timeline |
| Invesco Trust For |
| Blackrock Muniyield |
Invesco Trust and Blackrock Muniyield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Trust and Blackrock Muniyield
The main advantage of trading using opposite Invesco Trust and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Trust position performs unexpectedly, Blackrock Muniyield 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 Blackrock Muniyield will offset losses from the drop in Blackrock Muniyield's long position.| Invesco Trust vs. Invesco Municipal Income | Invesco Trust vs. DWS Municipal Income | Invesco Trust vs. MFS Municipal Income | Invesco Trust vs. MFS High Income |
| Blackrock Muniyield vs. MFS Investment Grade | Blackrock Muniyield vs. Eaton Vance National | Blackrock Muniyield vs. Blackrock Muniyield Quality | Blackrock Muniyield vs. Munivest Fund |
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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