Correlation Between Invesco Trust and CBH
Can any of the company-specific risk be diversified away by investing in both Invesco Trust and CBH 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 CBH 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 CBH, you can compare the effects of market volatilities on Invesco Trust and CBH 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 CBH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Trust and CBH.
Diversification Opportunities for Invesco Trust and CBH
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Invesco and CBH is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Trust For and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH 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 CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Invesco Trust i.e., Invesco Trust and CBH go up and down completely randomly.
Pair Corralation between Invesco Trust and CBH
Considering the 90-day investment horizon Invesco Trust is expected to generate 6.73 times less return on investment than CBH. But when comparing it to its historical volatility, Invesco Trust For is 11.12 times less risky than CBH. It trades about 0.13 of its potential returns per unit of risk. CBH is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 835.00 in CBH on August 24, 2024 and sell it today you would earn a total of 922.00 from holding CBH or generate 110.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.11% |
| Values | Daily Returns |
Invesco Trust For vs. CBH
Performance |
| Timeline |
| Invesco Trust For |
| CBH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Invesco Trust and CBH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Trust and CBH
The main advantage of trading using opposite Invesco Trust and CBH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Trust position performs unexpectedly, CBH 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 CBH will offset losses from the drop in CBH'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 |
| CBH vs. MFS Investment Grade | CBH vs. Invesco High Income | CBH vs. Eaton Vance National | CBH vs. Nuveen California Select |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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