Correlation Between Invesco Municipal and Invesco Global
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal and Invesco Global 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 Global 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 Global Low, you can compare the effects of market volatilities on Invesco Municipal and Invesco Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Invesco Global.
Diversification Opportunities for Invesco Municipal and Invesco Global
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 Global Low in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Global Low 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Global Low has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and Invesco Global go up and down completely randomly.
Pair Corralation between Invesco Municipal and Invesco Global
Assuming the 90 days horizon Invesco Municipal Income is expected to generate 0.26 times more return on investment than Invesco Global. However, Invesco Municipal Income is 3.9 times less risky than Invesco Global. It trades about 0.47 of its potential returns per unit of risk. Invesco Global Low is currently generating about -0.06 per unit of risk. If you would invest 1,199 in Invesco Municipal Income on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Invesco Municipal Income or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Invesco Municipal Income vs. Invesco Global Low
Performance |
| Timeline |
| Invesco Municipal Income |
| Invesco Global Low |
Invesco Municipal and Invesco Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and Invesco Global
The main advantage of trading using opposite Invesco Municipal and Invesco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal position performs unexpectedly, Invesco Global 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 Global will offset losses from the drop in Invesco Global's long position.| Invesco Municipal vs. L Abbett Growth | Invesco Municipal vs. Rational Defensive Growth | Invesco Municipal vs. Artisan Small Cap | Invesco Municipal vs. Smallcap Growth Fund |
| Invesco Global vs. Tiaa Cref Small Cap Blend | Invesco Global vs. Huber Capital Diversified | Invesco Global vs. Western Asset Diversified | Invesco Global vs. Wasatch Small Cap |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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