Correlation Between Invesco Municipal and Invesco Equally
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal and Invesco Equally 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 Equally 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 Equally Weighted Sp, you can compare the effects of market volatilities on Invesco Municipal and Invesco Equally 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 Equally. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Invesco Equally.
Diversification Opportunities for Invesco Municipal and Invesco Equally
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Invesco and Invesco is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Income and Invesco Equally Weighted Sp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Equally Weig 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 Equally. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Equally Weig has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and Invesco Equally go up and down completely randomly.
Pair Corralation between Invesco Municipal and Invesco Equally
Assuming the 90 days horizon Invesco Municipal is expected to generate 2.87 times less return on investment than Invesco Equally. But when comparing it to its historical volatility, Invesco Municipal Income is 3.12 times less risky than Invesco Equally. It trades about 0.08 of its potential returns per unit of risk. Invesco Equally Weighted Sp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,179 in Invesco Equally Weighted Sp on September 13, 2024 and sell it today you would earn a total of 2,074 from holding Invesco Equally Weighted Sp or generate 33.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Municipal Income vs. Invesco Equally Weighted Sp
Performance |
| Timeline |
| Invesco Municipal Income |
| Invesco Equally Weig |
Invesco Municipal and Invesco Equally Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and Invesco Equally
The main advantage of trading using opposite Invesco Municipal and Invesco Equally positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal position performs unexpectedly, Invesco Equally 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 Equally will offset losses from the drop in Invesco Equally's long position.| Invesco Municipal vs. Invesco Technology Fund | Invesco Municipal vs. Global Technology Portfolio | Invesco Municipal vs. Vanguard Information Technology | Invesco Municipal vs. Allianzgi Technology Fund |
| Invesco Equally vs. Invesco Municipal Income | Invesco Equally vs. Invesco Municipal Income | Invesco Equally vs. Invesco Municipal Income | Invesco Equally 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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