Correlation Between Invesco Municipal and Alliancebernstein
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal and Alliancebernstein 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 Alliancebernstein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Municipal Opportunity and Alliancebernstein National Municipal, you can compare the effects of market volatilities on Invesco Municipal and Alliancebernstein 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 Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Alliancebernstein.
Diversification Opportunities for Invesco Municipal and Alliancebernstein
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Alliancebernstein is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Opportunity and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein 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 Opportunity are associated (or correlated) with Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and Alliancebernstein go up and down completely randomly.
Pair Corralation between Invesco Municipal and Alliancebernstein
Considering the 90-day investment horizon Invesco Municipal Opportunity is expected to generate 0.91 times more return on investment than Alliancebernstein. However, Invesco Municipal Opportunity is 1.1 times less risky than Alliancebernstein. It trades about 0.04 of its potential returns per unit of risk. Alliancebernstein National Municipal is currently generating about -0.02 per unit of risk. If you would invest 991.00 in Invesco Municipal Opportunity on September 15, 2024 and sell it today you would earn a total of 4.00 from holding Invesco Municipal Opportunity or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Municipal Opportunity vs. Alliancebernstein National Mun
Performance |
| Timeline |
| Invesco Municipal |
| Alliancebernstein |
Invesco Municipal and Alliancebernstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and Alliancebernstein
The main advantage of trading using opposite Invesco Municipal and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal position performs unexpectedly, Alliancebernstein 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 Alliancebernstein will offset losses from the drop in Alliancebernstein's long position.| Invesco Municipal vs. Invesco Quality Municipal | Invesco Municipal vs. Invesco Advantage MIT | Invesco Municipal vs. Invesco Municipal Trust | Invesco Municipal vs. Invesco California Value |
| Alliancebernstein vs. GCM Grosvenor | Alliancebernstein vs. Invesco Municipal Opportunity | Alliancebernstein vs. Blackrock Municipal Target | Alliancebernstein vs. Cohen Steers Qualityome |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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