Correlation Between Invesco Municipal and Oppenheimer Senior
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal and Oppenheimer Senior 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 Oppenheimer Senior 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 Oppenheimer Senior Floating, you can compare the effects of market volatilities on Invesco Municipal and Oppenheimer Senior 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 Oppenheimer Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Oppenheimer Senior.
Diversification Opportunities for Invesco Municipal and Oppenheimer Senior
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Invesco and Oppenheimer is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Income and Oppenheimer Senior Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Senior 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 Oppenheimer Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Senior has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and Oppenheimer Senior go up and down completely randomly.
Pair Corralation between Invesco Municipal and Oppenheimer Senior
Assuming the 90 days horizon Invesco Municipal Income is expected to generate 4.56 times more return on investment than Oppenheimer Senior. However, Invesco Municipal is 4.56 times more volatile than Oppenheimer Senior Floating. It trades about 0.17 of its potential returns per unit of risk. Oppenheimer Senior Floating is currently generating about -0.1 per unit of risk. If you would invest 1,200 in Invesco Municipal Income on September 1, 2024 and sell it today you would earn a total of 15.00 from holding Invesco Municipal Income or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Municipal Income vs. Oppenheimer Senior Floating
Performance |
| Timeline |
| Invesco Municipal Income |
| Oppenheimer Senior |
Invesco Municipal and Oppenheimer Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and Oppenheimer Senior
The main advantage of trading using opposite Invesco Municipal and Oppenheimer Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal position performs unexpectedly, Oppenheimer Senior 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 Oppenheimer Senior will offset losses from the drop in Oppenheimer Senior's long position.| Invesco Municipal vs. Invesco Municipal Income | Invesco Municipal vs. Invesco Municipal Income | Invesco Municipal vs. Oppenheimer Rising Dividends | Invesco Municipal vs. Invesco High Yield |
| Oppenheimer Senior vs. Invesco Municipal Income | Oppenheimer Senior vs. Invesco Municipal Income | Oppenheimer Senior vs. Invesco Municipal Income | Oppenheimer Senior 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 Stocks Directory module to find actively traded stocks across global markets.
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