Correlation Between Invesco Advantage and Thornburg Income
Can any of the company-specific risk be diversified away by investing in both Invesco Advantage and Thornburg Income 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 Thornburg Income 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 Thornburg Income Builder, you can compare the effects of market volatilities on Invesco Advantage and Thornburg Income 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 Thornburg Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Advantage and Thornburg Income.
Diversification Opportunities for Invesco Advantage and Thornburg Income
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Invesco and Thornburg is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Advantage MIT and Thornburg Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Income Builder 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 Thornburg Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Income Builder has no effect on the direction of Invesco Advantage i.e., Invesco Advantage and Thornburg Income go up and down completely randomly.
Pair Corralation between Invesco Advantage and Thornburg Income
Considering the 90-day investment horizon Invesco Advantage MIT is expected to generate 0.88 times more return on investment than Thornburg Income. However, Invesco Advantage MIT is 1.14 times less risky than Thornburg Income. It trades about 0.14 of its potential returns per unit of risk. Thornburg Income Builder is currently generating about 0.11 per unit of risk. If you would invest 812.00 in Invesco Advantage MIT on September 3, 2024 and sell it today you would earn a total of 109.00 from holding Invesco Advantage MIT or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Advantage MIT vs. Thornburg Income Builder
Performance |
| Timeline |
| Invesco Advantage MIT |
| Thornburg Income Builder |
Invesco Advantage and Thornburg Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Advantage and Thornburg Income
The main advantage of trading using opposite Invesco Advantage and Thornburg Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Advantage position performs unexpectedly, Thornburg Income 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 Thornburg Income will offset losses from the drop in Thornburg Income'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 |
| Thornburg Income vs. Western Asset Global | Thornburg Income vs. Invesco Trust For | Thornburg Income vs. Logan Ridge Finance | Thornburg Income vs. Invesco Advantage MIT |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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