Correlation Between Invesco Municipal and Logan Ridge
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal and Logan Ridge 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 Municipal and Logan Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Municipal Trust and Logan Ridge Finance, you can compare the effects of market volatilities on Invesco Municipal and Logan Ridge 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 Municipal with a short position of Logan Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Logan Ridge.
Diversification Opportunities for Invesco Municipal and Logan Ridge
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and Logan is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Trust and Logan Ridge Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logan Ridge Finance and Invesco Municipal 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 Municipal Trust are associated (or correlated) with Logan Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logan Ridge Finance has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and Logan Ridge go up and down completely randomly.
Pair Corralation between Invesco Municipal and Logan Ridge
Considering the 90-day investment horizon Invesco Municipal Trust is expected to generate 0.55 times more return on investment than Logan Ridge. However, Invesco Municipal Trust is 1.82 times less risky than Logan Ridge. It trades about 0.09 of its potential returns per unit of risk. Logan Ridge Finance is currently generating about 0.0 per unit of risk. If you would invest 1,002 in Invesco Municipal Trust on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Invesco Municipal Trust or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Municipal Trust vs. Logan Ridge Finance
Performance |
| Timeline |
| Invesco Municipal Trust |
| Logan Ridge Finance |
Invesco Municipal and Logan Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and Logan Ridge
The main advantage of trading using opposite Invesco Municipal and Logan Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal position performs unexpectedly, Logan Ridge 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 Logan Ridge will offset losses from the drop in Logan Ridge's long position.| Invesco Municipal vs. Invesco Trust For | Invesco Municipal vs. Invesco Quality Municipal | Invesco Municipal vs. Invesco Municipal Opportunity | Invesco Municipal vs. MFS High Income |
| Logan Ridge vs. Stellus Capital Investment | Logan Ridge vs. Prospect Capital | Logan Ridge vs. Gladstone Capital | Logan Ridge vs. Main Street Capital |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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