Correlation Between Invesco Trust and A SPAC
Can any of the company-specific risk be diversified away by investing in both Invesco Trust and A SPAC 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 Trust and A SPAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Trust For and A SPAC II, you can compare the effects of market volatilities on Invesco Trust and A SPAC 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 Trust with a short position of A SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Trust and A SPAC.
Diversification Opportunities for Invesco Trust and A SPAC
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Invesco and ASCB is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Trust For and A SPAC II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A SPAC II and Invesco Trust 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 Trust For are associated (or correlated) with A SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A SPAC II has no effect on the direction of Invesco Trust i.e., Invesco Trust and A SPAC go up and down completely randomly.
Pair Corralation between Invesco Trust and A SPAC
Considering the 90-day investment horizon Invesco Trust For is expected to generate 2.42 times more return on investment than A SPAC. However, Invesco Trust is 2.42 times more volatile than A SPAC II. It trades about 0.0 of its potential returns per unit of risk. A SPAC II is currently generating about -0.16 per unit of risk. If you would invest 1,141 in Invesco Trust For on September 12, 2024 and sell it today you would lose (1.00) from holding Invesco Trust For or give up 0.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Trust For vs. A SPAC II
Performance |
| Timeline |
| Invesco Trust For |
| A SPAC II |
Invesco Trust and A SPAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Trust and A SPAC
The main advantage of trading using opposite Invesco Trust and A SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Trust position performs unexpectedly, A SPAC 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 A SPAC will offset losses from the drop in A SPAC's long position.| Invesco Trust vs. Pimco New York | Invesco Trust vs. Pimco New York | Invesco Trust vs. BlackRock New York | Invesco Trust vs. Invesco California Value |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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