Correlation Between Invesco Municipal and Virtus Dividend
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal and Virtus Dividend 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 Virtus Dividend 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 Virtus Dividend Interest, you can compare the effects of market volatilities on Invesco Municipal and Virtus Dividend 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 Virtus Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Virtus Dividend.
Diversification Opportunities for Invesco Municipal and Virtus Dividend
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Invesco and Virtus is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Opportunity and Virtus Dividend Interest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Dividend Interest 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 Virtus Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Dividend Interest has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and Virtus Dividend go up and down completely randomly.
Pair Corralation between Invesco Municipal and Virtus Dividend
Considering the 90-day investment horizon Invesco Municipal Opportunity is expected to under-perform the Virtus Dividend. In addition to that, Invesco Municipal is 1.45 times more volatile than Virtus Dividend Interest. It trades about -0.1 of its total potential returns per unit of risk. Virtus Dividend Interest is currently generating about 0.02 per unit of volatility. If you would invest 1,262 in Virtus Dividend Interest on September 18, 2024 and sell it today you would earn a total of 2.00 from holding Virtus Dividend Interest or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Invesco Municipal Opportunity vs. Virtus Dividend Interest
Performance |
| Timeline |
| Invesco Municipal |
| Virtus Dividend Interest |
Invesco Municipal and Virtus Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and Virtus Dividend
The main advantage of trading using opposite Invesco Municipal and Virtus Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal position performs unexpectedly, Virtus Dividend 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 Virtus Dividend will offset losses from the drop in Virtus Dividend'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 |
| Virtus Dividend vs. Blackrock Muniyield | Virtus Dividend vs. Blackrock Muni Intermediate | Virtus Dividend vs. Blackrock Muniyield Quality | Virtus Dividend vs. Blackrock Muniyield Quality |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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