Correlation Between Invesco Pennsylvania and Stellus Capital
Can any of the company-specific risk be diversified away by investing in both Invesco Pennsylvania and Stellus Capital 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 Pennsylvania and Stellus Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Pennsylvania Value and Stellus Capital Investment, you can compare the effects of market volatilities on Invesco Pennsylvania and Stellus Capital 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 Pennsylvania with a short position of Stellus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Pennsylvania and Stellus Capital.
Diversification Opportunities for Invesco Pennsylvania and Stellus Capital
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Stellus is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Pennsylvania Value and Stellus Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stellus Capital Inve and Invesco Pennsylvania 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 Pennsylvania Value are associated (or correlated) with Stellus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stellus Capital Inve has no effect on the direction of Invesco Pennsylvania i.e., Invesco Pennsylvania and Stellus Capital go up and down completely randomly.
Pair Corralation between Invesco Pennsylvania and Stellus Capital
Considering the 90-day investment horizon Invesco Pennsylvania Value is expected to generate 0.23 times more return on investment than Stellus Capital. However, Invesco Pennsylvania Value is 4.43 times less risky than Stellus Capital. It trades about -0.14 of its potential returns per unit of risk. Stellus Capital Investment is currently generating about -0.15 per unit of risk. If you would invest 1,053 in Invesco Pennsylvania Value on December 24, 2024 and sell it today you would lose (16.00) from holding Invesco Pennsylvania Value or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Pennsylvania Value vs. Stellus Capital Investment
Performance |
| Timeline |
| Invesco Pennsylvania |
| Stellus Capital Inve |
Invesco Pennsylvania and Stellus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Pennsylvania and Stellus Capital
The main advantage of trading using opposite Invesco Pennsylvania and Stellus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Pennsylvania position performs unexpectedly, Stellus Capital 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 Stellus Capital will offset losses from the drop in Stellus Capital's long position.| Invesco Pennsylvania vs. Pimco New York | Invesco Pennsylvania vs. Blackrock Muniholdings Ny | Invesco Pennsylvania vs. Eaton Vance National | Invesco Pennsylvania vs. Nuveen New York |
| Stellus Capital vs. PennantPark Floating Rate | Stellus Capital vs. Gladstone Capital | Stellus Capital vs. Gladstone Investment | Stellus Capital vs. Prospect Capital |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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