Correlation Between Invesco Municipal and Invesco Multi-asset
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal and Invesco Multi-asset 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 Multi-asset 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 Multi Asset Income, you can compare the effects of market volatilities on Invesco Municipal and Invesco Multi-asset 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 Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Invesco Multi-asset.
Diversification Opportunities for Invesco Municipal and Invesco Multi-asset
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Invesco is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Income and Invesco Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Multi Asset 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 Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Multi Asset has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and Invesco Multi-asset go up and down completely randomly.
Pair Corralation between Invesco Municipal and Invesco Multi-asset
Assuming the 90 days horizon Invesco Municipal is expected to generate 1.85 times less return on investment than Invesco Multi-asset. But when comparing it to its historical volatility, Invesco Municipal Income is 1.32 times less risky than Invesco Multi-asset. It trades about 0.06 of its potential returns per unit of risk. Invesco Multi Asset Income is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 692.00 in Invesco Multi Asset Income on September 2, 2024 and sell it today you would earn a total of 112.00 from holding Invesco Multi Asset Income or generate 16.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Municipal Income vs. Invesco Multi Asset Income
Performance |
| Timeline |
| Invesco Municipal Income |
| Invesco Multi Asset |
Invesco Municipal and Invesco Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and Invesco Multi-asset
The main advantage of trading using opposite Invesco Municipal and Invesco Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal position performs unexpectedly, Invesco Multi-asset 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 Multi-asset will offset losses from the drop in Invesco Multi-asset's long position.| Invesco Municipal vs. Fidelity Advisor Diversified | Invesco Municipal vs. Tax Managed Mid Small | Invesco Municipal vs. Tiaa Cref Smallmid Cap Equity | Invesco Municipal vs. Principal Lifetime Hybrid |
| Invesco Multi-asset vs. Invesco Municipal Income | Invesco Multi-asset vs. Invesco Municipal Income | Invesco Multi-asset vs. Invesco Municipal Income | Invesco Multi-asset vs. Oppenheimer Rising Dividends |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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