Correlation Between Invesco Municipal and Oppenheimer Target
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal and Oppenheimer Target 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 Target 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 Target, you can compare the effects of market volatilities on Invesco Municipal and Oppenheimer Target 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 Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Oppenheimer Target.
Diversification Opportunities for Invesco Municipal and Oppenheimer Target
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and Oppenheimer is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Income and Oppenheimer Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Target 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 Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Target has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and Oppenheimer Target go up and down completely randomly.
Pair Corralation between Invesco Municipal and Oppenheimer Target
Assuming the 90 days horizon Invesco Municipal is expected to generate 3.52 times less return on investment than Oppenheimer Target. But when comparing it to its historical volatility, Invesco Municipal Income is 3.4 times less risky than Oppenheimer Target. It trades about 0.14 of its potential returns per unit of risk. Oppenheimer Target is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,305 in Oppenheimer Target on August 29, 2024 and sell it today you would earn a total of 162.00 from holding Oppenheimer Target or generate 3.76% 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 Target
Performance |
| Timeline |
| Invesco Municipal Income |
| Oppenheimer Target |
Invesco Municipal and Oppenheimer Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and Oppenheimer Target
The main advantage of trading using opposite Invesco Municipal and Oppenheimer Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal position performs unexpectedly, Oppenheimer Target 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 Target will offset losses from the drop in Oppenheimer Target'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 |
| Oppenheimer Target vs. Dimensional Retirement Income | Oppenheimer Target vs. Calvert Moderate Allocation | Oppenheimer Target vs. Moderately Aggressive Balanced | Oppenheimer Target vs. Lifestyle Ii Moderate |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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