Correlation Between Invesco Trust and Bank of Botetourt
Can any of the company-specific risk be diversified away by investing in both Invesco Trust and Bank of Botetourt 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 Bank of Botetourt 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 Bank of Botetourt, you can compare the effects of market volatilities on Invesco Trust and Bank of Botetourt 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 Bank of Botetourt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Trust and Bank of Botetourt.
Diversification Opportunities for Invesco Trust and Bank of Botetourt
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Invesco and Bank is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Trust For and Bank of Botetourt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Botetourt 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 Bank of Botetourt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Botetourt has no effect on the direction of Invesco Trust i.e., Invesco Trust and Bank of Botetourt go up and down completely randomly.
Pair Corralation between Invesco Trust and Bank of Botetourt
Considering the 90-day investment horizon Invesco Trust For is expected to generate 0.77 times more return on investment than Bank of Botetourt. However, Invesco Trust For is 1.31 times less risky than Bank of Botetourt. It trades about 0.4 of its potential returns per unit of risk. Bank of Botetourt is currently generating about 0.15 per unit of risk. If you would invest 1,110 in Invesco Trust For on September 4, 2024 and sell it today you would earn a total of 43.00 from holding Invesco Trust For or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Trust For vs. Bank of Botetourt
Performance |
| Timeline |
| Invesco Trust For |
| Bank of Botetourt |
Invesco Trust and Bank of Botetourt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Trust and Bank of Botetourt
The main advantage of trading using opposite Invesco Trust and Bank of Botetourt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Trust position performs unexpectedly, Bank of Botetourt 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 Bank of Botetourt will offset losses from the drop in Bank of Botetourt'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 |
| Bank of Botetourt vs. Western Asset Global | Bank of Botetourt vs. Invesco Trust For | Bank of Botetourt vs. Logan Ridge Finance | Bank of Botetourt vs. Invesco Advantage MIT |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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