Correlation Between Invesco Municipal and Oppenheimer Rochester
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal and Oppenheimer Rochester 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 Rochester 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 Rochester Ltdterm, you can compare the effects of market volatilities on Invesco Municipal and Oppenheimer Rochester 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 Rochester. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Oppenheimer Rochester.
Diversification Opportunities for Invesco Municipal and Oppenheimer Rochester
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Oppenheimer is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Income and Oppenheimer Rochester Ltdterm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Rochester 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 Rochester. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Rochester has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and Oppenheimer Rochester go up and down completely randomly.
Pair Corralation between Invesco Municipal and Oppenheimer Rochester
Assuming the 90 days horizon Invesco Municipal Income is expected to generate 1.33 times more return on investment than Oppenheimer Rochester. However, Invesco Municipal is 1.33 times more volatile than Oppenheimer Rochester Ltdterm. It trades about 0.13 of its potential returns per unit of risk. Oppenheimer Rochester Ltdterm is currently generating about 0.11 per unit of risk. If you would invest 1,165 in Invesco Municipal Income on August 29, 2024 and sell it today you would earn a total of 49.00 from holding Invesco Municipal Income or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Invesco Municipal Income vs. Oppenheimer Rochester Ltdterm
Performance |
| Timeline |
| Invesco Municipal Income |
| Oppenheimer Rochester |
Invesco Municipal and Oppenheimer Rochester Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and Oppenheimer Rochester
The main advantage of trading using opposite Invesco Municipal and Oppenheimer Rochester positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal position performs unexpectedly, Oppenheimer Rochester 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 Rochester will offset losses from the drop in Oppenheimer Rochester's long position.| Invesco Municipal vs. Health Care Fund | Invesco Municipal vs. Prudential Health Sciences | Invesco Municipal vs. Baron Health Care | Invesco Municipal vs. Deutsche Health And |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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