Correlation Between Invesco Advantage and STRATSSM Certificates
Can any of the company-specific risk be diversified away by investing in both Invesco Advantage and STRATSSM Certificates 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 STRATSSM Certificates 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 STRATSSM Certificates series, you can compare the effects of market volatilities on Invesco Advantage and STRATSSM Certificates 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 STRATSSM Certificates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Advantage and STRATSSM Certificates.
Diversification Opportunities for Invesco Advantage and STRATSSM Certificates
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Invesco and STRATSSM is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Advantage MIT and STRATSSM Certificates series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRATSSM Certificates 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 STRATSSM Certificates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRATSSM Certificates has no effect on the direction of Invesco Advantage i.e., Invesco Advantage and STRATSSM Certificates go up and down completely randomly.
Pair Corralation between Invesco Advantage and STRATSSM Certificates
Considering the 90-day investment horizon Invesco Advantage MIT is expected to generate 0.68 times more return on investment than STRATSSM Certificates. However, Invesco Advantage MIT is 1.47 times less risky than STRATSSM Certificates. It trades about 0.11 of its potential returns per unit of risk. STRATSSM Certificates series is currently generating about 0.06 per unit of risk. If you would invest 782.00 in Invesco Advantage MIT on September 4, 2024 and sell it today you would earn a total of 141.00 from holding Invesco Advantage MIT or generate 18.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.04% |
| Values | Daily Returns |
Invesco Advantage MIT vs. STRATSSM Certificates series
Performance |
| Timeline |
| Invesco Advantage MIT |
| STRATSSM Certificates |
Invesco Advantage and STRATSSM Certificates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Advantage and STRATSSM Certificates
The main advantage of trading using opposite Invesco Advantage and STRATSSM Certificates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Advantage position performs unexpectedly, STRATSSM Certificates 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 STRATSSM Certificates will offset losses from the drop in STRATSSM Certificates' 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 |
| STRATSSM Certificates vs. STRATS SM Trust | STRATSSM Certificates vs. Strats SM Trust | STRATSSM Certificates vs. STRATS SM Trust | STRATSSM Certificates vs. Strats SM Trust |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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