Correlation Between Invesco Advantage and Bimini Capital
Can any of the company-specific risk be diversified away by investing in both Invesco Advantage and Bimini Capital 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 Advantage and Bimini Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Advantage MIT and Bimini Capital Management, you can compare the effects of market volatilities on Invesco Advantage and Bimini Capital 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 Advantage with a short position of Bimini Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Advantage and Bimini Capital.
Diversification Opportunities for Invesco Advantage and Bimini Capital
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Bimini is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Advantage MIT and Bimini Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bimini Capital Management and Invesco Advantage 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 Advantage MIT are associated (or correlated) with Bimini Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bimini Capital Management has no effect on the direction of Invesco Advantage i.e., Invesco Advantage and Bimini Capital go up and down completely randomly.
Pair Corralation between Invesco Advantage and Bimini Capital
Considering the 90-day investment horizon Invesco Advantage is expected to generate 8.4 times less return on investment than Bimini Capital. But when comparing it to its historical volatility, Invesco Advantage MIT is 8.99 times less risky than Bimini Capital. It trades about 0.18 of its potential returns per unit of risk. Bimini Capital Management is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 93.00 in Bimini Capital Management on September 3, 2024 and sell it today you would earn a total of 17.00 from holding Bimini Capital Management or generate 18.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Advantage MIT vs. Bimini Capital Management
Performance |
| Timeline |
| Invesco Advantage MIT |
| Bimini Capital Management |
Invesco Advantage and Bimini Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Advantage and Bimini Capital
The main advantage of trading using opposite Invesco Advantage and Bimini Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Advantage position performs unexpectedly, Bimini Capital 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 Bimini Capital will offset losses from the drop in Bimini Capital's long position.| Invesco Advantage vs. Invesco Quality Municipal | Invesco Advantage vs. Invesco California Value | Invesco Advantage vs. DWS Municipal Income | Invesco Advantage vs. Invesco Trust For |
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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 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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