Correlation Between Invesco Advantage and BlackRock Credit
Can any of the company-specific risk be diversified away by investing in both Invesco Advantage and BlackRock Credit 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 BlackRock Credit 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 BlackRock Credit Allocation, you can compare the effects of market volatilities on Invesco Advantage and BlackRock Credit 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 BlackRock Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Advantage and BlackRock Credit.
Diversification Opportunities for Invesco Advantage and BlackRock Credit
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and BlackRock is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Advantage MIT and BlackRock Credit Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Credit All 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 BlackRock Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Credit All has no effect on the direction of Invesco Advantage i.e., Invesco Advantage and BlackRock Credit go up and down completely randomly.
Pair Corralation between Invesco Advantage and BlackRock Credit
Considering the 90-day investment horizon Invesco Advantage is expected to generate 1.58 times less return on investment than BlackRock Credit. But when comparing it to its historical volatility, Invesco Advantage MIT is 1.0 times less risky than BlackRock Credit. It trades about 0.04 of its potential returns per unit of risk. BlackRock Credit Allocation is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 873.00 in BlackRock Credit Allocation on December 14, 2024 and sell it today you would earn a total of 186.00 from holding BlackRock Credit Allocation or generate 21.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Advantage MIT vs. BlackRock Credit Allocation
Performance |
| Timeline |
| Invesco Advantage MIT |
| BlackRock Credit All |
Invesco Advantage and BlackRock Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Advantage and BlackRock Credit
The main advantage of trading using opposite Invesco Advantage and BlackRock Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Advantage position performs unexpectedly, BlackRock Credit 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 Credit will offset losses from the drop in BlackRock Credit's long position.| Invesco Advantage vs. Invesco Quality Municipal | ||
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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