Correlation Between Invesco Advantage and Farmers Merchants
Can any of the company-specific risk be diversified away by investing in both Invesco Advantage and Farmers Merchants 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 Farmers Merchants 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 Farmers Merchants Bancorp, you can compare the effects of market volatilities on Invesco Advantage and Farmers Merchants 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 Farmers Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Advantage and Farmers Merchants.
Diversification Opportunities for Invesco Advantage and Farmers Merchants
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Invesco and Farmers is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Advantage MIT and Farmers Merchants Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Merchants Bancorp 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 Farmers Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Merchants Bancorp has no effect on the direction of Invesco Advantage i.e., Invesco Advantage and Farmers Merchants go up and down completely randomly.
Pair Corralation between Invesco Advantage and Farmers Merchants
Considering the 90-day investment horizon Invesco Advantage MIT is expected to generate 0.41 times more return on investment than Farmers Merchants. However, Invesco Advantage MIT is 2.42 times less risky than Farmers Merchants. It trades about 0.06 of its potential returns per unit of risk. Farmers Merchants Bancorp is currently generating about 0.02 per unit of risk. If you would invest 763.00 in Invesco Advantage MIT on September 12, 2024 and sell it today you would earn a total of 156.00 from holding Invesco Advantage MIT or generate 20.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.34% |
| Values | Daily Returns |
Invesco Advantage MIT vs. Farmers Merchants Bancorp
Performance |
| Timeline |
| Invesco Advantage MIT |
| Farmers Merchants Bancorp |
Invesco Advantage and Farmers Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Advantage and Farmers Merchants
The main advantage of trading using opposite Invesco Advantage and Farmers Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Advantage position performs unexpectedly, Farmers Merchants 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 Farmers Merchants will offset losses from the drop in Farmers Merchants' 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 |
| Farmers Merchants vs. Freedom Bank of | Farmers Merchants vs. HUMANA INC | Farmers Merchants vs. Barloworld Ltd ADR | Farmers Merchants vs. Morningstar Unconstrained Allocation |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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