Correlation Between Invesco Municipal and Invesco Developing
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal and Invesco Developing 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 Invesco Developing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Municipal Income and Invesco Developing Markets, you can compare the effects of market volatilities on Invesco Municipal and Invesco Developing 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 Invesco Developing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Invesco Developing.
Diversification Opportunities for Invesco Municipal and Invesco Developing
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Invesco and Invesco is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Income and Invesco Developing Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Developing 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 Income are associated (or correlated) with Invesco Developing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Developing has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and Invesco Developing go up and down completely randomly.
Pair Corralation between Invesco Municipal and Invesco Developing
Assuming the 90 days horizon Invesco Municipal Income is expected to generate 0.27 times more return on investment than Invesco Developing. However, Invesco Municipal Income is 3.68 times less risky than Invesco Developing. It trades about 0.1 of its potential returns per unit of risk. Invesco Developing Markets is currently generating about 0.02 per unit of risk. If you would invest 1,175 in Invesco Municipal Income on September 3, 2024 and sell it today you would earn a total of 36.00 from holding Invesco Municipal Income or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Municipal Income vs. Invesco Developing Markets
Performance |
| Timeline |
| Invesco Municipal Income |
| Invesco Developing |
Invesco Municipal and Invesco Developing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and Invesco Developing
The main advantage of trading using opposite Invesco Municipal and Invesco Developing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal position performs unexpectedly, Invesco Developing 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 Invesco Developing will offset losses from the drop in Invesco Developing's long position.| Invesco Municipal vs. Vanguard Long Term Tax Exempt | Invesco Municipal vs. Vanguard High Yield Tax Exempt | Invesco Municipal vs. Franklin Federal Tax Free | Invesco Municipal vs. Franklin Federal Tax Free |
| Invesco Developing vs. Franklin Mutual Global | Invesco Developing vs. Templeton Growth Fund | Invesco Developing vs. Franklin Real Estate | Invesco Developing vs. HUMANA INC |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |