Correlation Between Invesco Municipal and TPG
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal and TPG 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 TPG 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 TPG Inc, you can compare the effects of market volatilities on Invesco Municipal and TPG 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 TPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and TPG.
Diversification Opportunities for Invesco Municipal and TPG
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and TPG is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Trust and TPG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG Inc 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 TPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG Inc has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and TPG go up and down completely randomly.
Pair Corralation between Invesco Municipal and TPG
Considering the 90-day investment horizon Invesco Municipal Trust is expected to generate 0.27 times more return on investment than TPG. However, Invesco Municipal Trust is 3.7 times less risky than TPG. It trades about 0.26 of its potential returns per unit of risk. TPG Inc is currently generating about -0.04 per unit of risk. If you would invest 971.00 in Invesco Municipal Trust on November 9, 2024 and sell it today you would earn a total of 29.00 from holding Invesco Municipal Trust or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Municipal Trust vs. TPG Inc
Performance |
| Timeline |
| Invesco Municipal Trust |
| TPG Inc |
Invesco Municipal and TPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and TPG
The main advantage of trading using opposite Invesco Municipal and TPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal position performs unexpectedly, TPG 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 TPG will offset losses from the drop in TPG'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 |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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